Correlation Between Fine Besteel and Ni Steel
Can any of the company-specific risk be diversified away by investing in both Fine Besteel and Ni 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 Fine Besteel and Ni Steel 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 Ni Steel, you can compare the effects of market volatilities on Fine Besteel and Ni 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 Fine Besteel with a short position of Ni Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fine Besteel and Ni Steel.
Diversification Opportunities for Fine Besteel and Ni Steel
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fine and 008260 is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Fine Besteel Co and Ni Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ni Steel 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 Ni Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ni Steel has no effect on the direction of Fine Besteel i.e., Fine Besteel and Ni Steel go up and down completely randomly.
Pair Corralation between Fine Besteel and Ni Steel
Assuming the 90 days trading horizon Fine Besteel Co is expected to under-perform the Ni Steel. In addition to that, Fine Besteel is 1.43 times more volatile than Ni Steel. It trades about -0.06 of its total potential returns per unit of risk. Ni Steel is currently generating about -0.06 per unit of volatility. If you would invest 677,559 in Ni Steel on August 29, 2024 and sell it today you would lose (290,559) from holding Ni Steel or give up 42.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fine Besteel Co vs. Ni Steel
Performance |
| Timeline |
| Fine Besteel |
| Ni Steel |
Fine Besteel and Ni Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fine Besteel and Ni Steel
The main advantage of trading using opposite Fine Besteel and Ni Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fine Besteel position performs unexpectedly, Ni 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 Ni Steel will offset losses from the drop in Ni Steel's long position.| Fine Besteel vs. Raontech | Fine Besteel vs. Yura Tech Co | Fine Besteel vs. FNSTech Co | Fine Besteel vs. CU Tech Corp |
| Ni Steel vs. Jeju Air Co | Ni Steel vs. Daejoo Electronic Materials | Ni Steel vs. TOPMATERIAL LTD | Ni Steel vs. LAKE MATERIALS LTD |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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