Correlation Between Fine Besteel and Oscotec
Can any of the company-specific risk be diversified away by investing in both Fine Besteel and Oscotec 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 Oscotec 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 Oscotec, you can compare the effects of market volatilities on Fine Besteel and Oscotec 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 Oscotec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fine Besteel and Oscotec.
Diversification Opportunities for Fine Besteel and Oscotec
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fine and Oscotec is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Fine Besteel Co and Oscotec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oscotec 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 Oscotec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oscotec has no effect on the direction of Fine Besteel i.e., Fine Besteel and Oscotec go up and down completely randomly.
Pair Corralation between Fine Besteel and Oscotec
Assuming the 90 days trading horizon Fine Besteel Co is expected to generate 0.69 times more return on investment than Oscotec. However, Fine Besteel Co is 1.46 times less risky than Oscotec. It trades about -0.03 of its potential returns per unit of risk. Oscotec is currently generating about -0.02 per unit of risk. If you would invest 113,100 in Fine Besteel Co on October 13, 2024 and sell it today you would lose (17,500) from holding Fine Besteel Co or give up 15.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fine Besteel Co vs. Oscotec
Performance |
| Timeline |
| Fine Besteel |
| Oscotec |
Fine Besteel and Oscotec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fine Besteel and Oscotec
The main advantage of trading using opposite Fine Besteel and Oscotec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fine Besteel position performs unexpectedly, Oscotec 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 Oscotec will offset losses from the drop in Oscotec'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 |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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