Correlation Between Finebesteel and Seah Steel
Can any of the company-specific risk be diversified away by investing in both Finebesteel and Seah Steel at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Finebesteel and Seah Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finebesteel and Seah Steel Corp, you can compare the effects of market volatilities on Finebesteel and Seah Steel and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Finebesteel with a short position of Seah Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finebesteel and Seah Steel.
Diversification Opportunities for Finebesteel and Seah Steel
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Finebesteel and Seah is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Finebesteel and Seah Steel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seah Steel Corp and Finebesteel is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Finebesteel are associated (or correlated) with Seah Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seah Steel Corp has no effect on the direction of Finebesteel i.e., Finebesteel and Seah Steel go up and down completely randomly.
Pair Corralation between Finebesteel and Seah Steel
Assuming the 90 days trading horizon Finebesteel is expected to generate 2.67 times less return on investment than Seah Steel. But when comparing it to its historical volatility, Finebesteel is 1.01 times less risky than Seah Steel. It trades about 0.12 of its potential returns per unit of risk. Seah Steel Corp is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 12,110,000 in Seah Steel Corp on October 23, 2024 and sell it today you would earn a total of 1,990,000 from holding Seah Steel Corp or generate 16.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Finebesteel vs. Seah Steel Corp
Performance |
| Timeline |
| Finebesteel |
| Seah Steel Corp |
Finebesteel and Seah Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finebesteel and Seah Steel
The main advantage of trading using opposite Finebesteel and Seah Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finebesteel position performs unexpectedly, Seah Steel can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Seah Steel will offset losses from the drop in Seah Steel's long position.| Finebesteel vs. Seoul Electronics Telecom | Finebesteel vs. Nable Communications | Finebesteel vs. PJ Electronics Co | Finebesteel vs. DAEDUCK ELECTRONICS CoLtd |
| Seah Steel vs. Korea Industrial Co | Seah Steel vs. BNK Financial Group | Seah Steel vs. Korean Reinsurance Co | Seah Steel vs. LG Chemicals |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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