Correlation Between Fine Besteel and Wonil Special
Can any of the company-specific risk be diversified away by investing in both Fine Besteel and Wonil Special 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 Wonil Special 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 Wonil Special Steel, you can compare the effects of market volatilities on Fine Besteel and Wonil Special 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 Wonil Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fine Besteel and Wonil Special.
Diversification Opportunities for Fine Besteel and Wonil Special
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Fine and Wonil is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Fine Besteel Co and Wonil Special Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wonil Special 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 Wonil Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wonil Special Steel has no effect on the direction of Fine Besteel i.e., Fine Besteel and Wonil Special go up and down completely randomly.
Pair Corralation between Fine Besteel and Wonil Special
Assuming the 90 days trading horizon Fine Besteel Co is expected to generate 3.3 times more return on investment than Wonil Special. However, Fine Besteel is 3.3 times more volatile than Wonil Special Steel. It trades about 0.25 of its potential returns per unit of risk. Wonil Special Steel is currently generating about -0.05 per unit of risk. If you would invest 85,400 in Fine Besteel Co on August 25, 2024 and sell it today you would earn a total of 22,800 from holding Fine Besteel Co or generate 26.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fine Besteel Co vs. Wonil Special Steel
Performance |
| Timeline |
| Fine Besteel |
| Wonil Special Steel |
Fine Besteel and Wonil Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fine Besteel and Wonil Special
The main advantage of trading using opposite Fine Besteel and Wonil Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fine Besteel position performs unexpectedly, Wonil Special 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 Wonil Special will offset losses from the drop in Wonil Special's long position.| Fine Besteel vs. AptaBio Therapeutics | Fine Besteel vs. Daewoo SBI SPAC | Fine Besteel vs. Dream Security co | Fine Besteel vs. Microfriend |
| Wonil Special vs. Samick Musical Instruments | Wonil Special vs. Coloray International Investment | Wonil Special vs. Homecast CoLtd | Wonil Special vs. Genie Music |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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