Correlation Between Fine Besteel and Samyoung Electronics
Can any of the company-specific risk be diversified away by investing in both Fine Besteel and Samyoung Electronics 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 Samyoung Electronics 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 Samyoung Electronics Co, you can compare the effects of market volatilities on Fine Besteel and Samyoung Electronics 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 Samyoung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fine Besteel and Samyoung Electronics.
Diversification Opportunities for Fine Besteel and Samyoung Electronics
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fine and Samyoung is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Fine Besteel Co and Samyoung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samyoung Electronics 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 Samyoung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samyoung Electronics has no effect on the direction of Fine Besteel i.e., Fine Besteel and Samyoung Electronics go up and down completely randomly.
Pair Corralation between Fine Besteel and Samyoung Electronics
Assuming the 90 days trading horizon Fine Besteel Co is expected to generate 3.09 times more return on investment than Samyoung Electronics. However, Fine Besteel is 3.09 times more volatile than Samyoung Electronics Co. It trades about 0.29 of its potential returns per unit of risk. Samyoung Electronics Co is currently generating about 0.39 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fine Besteel Co vs. Samyoung Electronics Co
Performance |
| Timeline |
| Fine Besteel |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Samyoung Electronics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Fine Besteel and Samyoung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fine Besteel and Samyoung Electronics
The main advantage of trading using opposite Fine Besteel and Samyoung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fine Besteel position performs unexpectedly, Samyoung Electronics 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 Samyoung Electronics will offset losses from the drop in Samyoung Electronics' long position.The idea behind Fine Besteel Co and Samyoung Electronics Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Samyoung Electronics vs. Daewoo SBI SPAC | Samyoung Electronics vs. Jahwa Electron | Samyoung Electronics vs. Wonbang Tech 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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