Correlation Between Fine Besteel and Moonbae Steel
Can any of the company-specific risk be diversified away by investing in both Fine Besteel and Moonbae 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 Moonbae 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 Moonbae Steel, you can compare the effects of market volatilities on Fine Besteel and Moonbae 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 Moonbae Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fine Besteel and Moonbae Steel.
Diversification Opportunities for Fine Besteel and Moonbae Steel
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fine and Moonbae is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Fine Besteel Co and Moonbae Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moonbae 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 Moonbae Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moonbae Steel has no effect on the direction of Fine Besteel i.e., Fine Besteel and Moonbae Steel go up and down completely randomly.
Pair Corralation between Fine Besteel and Moonbae Steel
Assuming the 90 days trading horizon Fine Besteel Co is expected to under-perform the Moonbae Steel. In addition to that, Fine Besteel is 1.54 times more volatile than Moonbae Steel. It trades about -0.03 of its total potential returns per unit of risk. Moonbae Steel is currently generating about -0.05 per unit of volatility. If you would invest 367,495 in Moonbae Steel on November 9, 2024 and sell it today you would lose (142,995) from holding Moonbae Steel or give up 38.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fine Besteel Co vs. Moonbae Steel
Performance |
| Timeline |
| Fine Besteel |
| Moonbae Steel |
Fine Besteel and Moonbae Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fine Besteel and Moonbae Steel
The main advantage of trading using opposite Fine Besteel and Moonbae Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fine Besteel position performs unexpectedly, Moonbae 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 Moonbae Steel will offset losses from the drop in Moonbae Steel's long position.| Fine Besteel vs. Vina Technology Co | Fine Besteel vs. Digital Imaging Technology | Fine Besteel vs. HB Technology TD | Fine Besteel vs. Hannong Chemicals |
| Moonbae Steel vs. INNOX Advanced Materials | Moonbae Steel vs. RF Materials Co | Moonbae Steel vs. Hyundai Engineering Plastics | Moonbae Steel vs. Samsung Publishing 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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