Correlation Between Fine Besteel and Bosung Power
Can any of the company-specific risk be diversified away by investing in both Fine Besteel and Bosung Power 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 Bosung Power 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 Bosung Power Technology, you can compare the effects of market volatilities on Fine Besteel and Bosung Power 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 Bosung Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fine Besteel and Bosung Power.
Diversification Opportunities for Fine Besteel and Bosung Power
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fine and Bosung is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Fine Besteel Co and Bosung Power Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bosung Power Technology 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 Bosung Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bosung Power Technology has no effect on the direction of Fine Besteel i.e., Fine Besteel and Bosung Power go up and down completely randomly.
Pair Corralation between Fine Besteel and Bosung Power
Assuming the 90 days trading horizon Fine Besteel Co is expected to under-perform the Bosung Power. But the stock apears to be less risky and, when comparing its historical volatility, Fine Besteel Co is 1.08 times less risky than Bosung Power. The stock trades about -0.13 of its potential returns per unit of risk. The Bosung Power Technology is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 250,000 in Bosung Power Technology on October 13, 2024 and sell it today you would earn a total of 20,000 from holding Bosung Power Technology or generate 8.0% 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. Bosung Power Technology
Performance |
| Timeline |
| Fine Besteel |
| Bosung Power Technology |
Fine Besteel and Bosung Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fine Besteel and Bosung Power
The main advantage of trading using opposite Fine Besteel and Bosung Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fine Besteel position performs unexpectedly, Bosung Power 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 Bosung Power will offset losses from the drop in Bosung Power's long position.| Fine Besteel vs. Jb Financial | Fine Besteel vs. SeAH Besteel Corp | Fine Besteel vs. Incar Financial Service | Fine Besteel vs. Han Kook Steel |
| Bosung Power vs. Iljin Display | Bosung Power vs. Lotte Data Communication | Bosung Power vs. Nice Information Telecommunication | Bosung Power vs. SCI Information Service |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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