Correlation Between Finebesteel and Shinhan WTI
Can any of the company-specific risk be diversified away by investing in both Finebesteel and Shinhan WTI 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 Shinhan WTI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finebesteel and Shinhan WTI Futures, you can compare the effects of market volatilities on Finebesteel and Shinhan WTI 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 Shinhan WTI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finebesteel and Shinhan WTI.
Diversification Opportunities for Finebesteel and Shinhan WTI
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Finebesteel and Shinhan is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Finebesteel and Shinhan WTI Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan WTI Futures 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 Shinhan WTI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinhan WTI Futures has no effect on the direction of Finebesteel i.e., Finebesteel and Shinhan WTI go up and down completely randomly.
Pair Corralation between Finebesteel and Shinhan WTI
Assuming the 90 days trading horizon Finebesteel is expected to generate 1.75 times more return on investment than Shinhan WTI. However, Finebesteel is 1.75 times more volatile than Shinhan WTI Futures. It trades about 0.29 of its potential returns per unit of risk. Shinhan WTI Futures is currently generating about 0.04 per unit of risk. If you would invest 92,100 in Finebesteel on November 7, 2024 and sell it today you would earn a total of 14,400 from holding Finebesteel or generate 15.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finebesteel vs. Shinhan WTI Futures
Performance |
| Timeline |
| Finebesteel |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Shinhan WTI Futures |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Finebesteel and Shinhan WTI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finebesteel and Shinhan WTI
The main advantage of trading using opposite Finebesteel and Shinhan WTI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finebesteel position performs unexpectedly, Shinhan WTI 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 Shinhan WTI will offset losses from the drop in Shinhan WTI's long position.| Finebesteel vs. Eagle Veterinary Technology | Finebesteel vs. V One Tech Co | Finebesteel vs. Hanwha Chemical Corp | Finebesteel vs. Raontech |
| Shinhan WTI vs. Next Entertainment World | Shinhan WTI vs. Eagle Veterinary Technology | Shinhan WTI vs. Narae Nanotech Corp | Shinhan WTI vs. Barunson Entertainment Arts |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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