Correlation Between Fine Besteel and Korea Industrial
Can any of the company-specific risk be diversified away by investing in both Fine Besteel and Korea Industrial 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 Fine Besteel and Korea Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fine Besteel Co and Korea Industrial Co, you can compare the effects of market volatilities on Fine Besteel and Korea Industrial 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 Fine Besteel with a short position of Korea Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fine Besteel and Korea Industrial.
Diversification Opportunities for Fine Besteel and Korea Industrial
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fine and Korea is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Fine Besteel Co and Korea Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Industrial and Fine Besteel 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 Fine Besteel Co are associated (or correlated) with Korea Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Industrial has no effect on the direction of Fine Besteel i.e., Fine Besteel and Korea Industrial go up and down completely randomly.
Pair Corralation between Fine Besteel and Korea Industrial
Assuming the 90 days trading horizon Fine Besteel Co is expected to generate 2.58 times more return on investment than Korea Industrial. However, Fine Besteel is 2.58 times more volatile than Korea Industrial Co. It trades about 0.29 of its potential returns per unit of risk. Korea Industrial Co is currently generating about 0.08 per unit of risk. If you would invest 92,100 in Fine Besteel Co on November 7, 2024 and sell it today you would earn a total of 14,400 from holding Fine Besteel Co 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 |
Fine Besteel Co vs. Korea Industrial Co
Performance |
| Timeline |
| Fine Besteel |
| Korea Industrial |
Fine Besteel and Korea Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fine Besteel and Korea Industrial
The main advantage of trading using opposite Fine Besteel and Korea Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fine Besteel position performs unexpectedly, Korea Industrial 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 Korea Industrial will offset losses from the drop in Korea Industrial's long position.| Fine Besteel vs. AptaBio Therapeutics | Fine Besteel vs. Daewoo SBI SPAC | Fine Besteel vs. Dream Security co | Fine Besteel vs. Microfriend |
| Korea Industrial vs. Orbitech Co | Korea Industrial vs. Vina Technology Co | Korea Industrial vs. SS TECH | Korea Industrial vs. Playgram Co |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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