Correlation Between Fine Besteel and Rorze Systems
Can any of the company-specific risk be diversified away by investing in both Fine Besteel and Rorze Systems 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 Rorze Systems 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 Rorze Systems, you can compare the effects of market volatilities on Fine Besteel and Rorze Systems 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 Rorze Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fine Besteel and Rorze Systems.
Diversification Opportunities for Fine Besteel and Rorze Systems
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fine and Rorze is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Fine Besteel Co and Rorze Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rorze Systems 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 Rorze Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rorze Systems has no effect on the direction of Fine Besteel i.e., Fine Besteel and Rorze Systems go up and down completely randomly.
Pair Corralation between Fine Besteel and Rorze Systems
Assuming the 90 days trading horizon Fine Besteel Co is expected to under-perform the Rorze Systems. But the stock apears to be less risky and, when comparing its historical volatility, Fine Besteel Co is 1.12 times less risky than Rorze Systems. The stock trades about -0.03 of its potential returns per unit of risk. The Rorze Systems is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 875,298 in Rorze Systems on October 25, 2024 and sell it today you would earn a total of 976,702 from holding Rorze Systems or generate 111.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Fine Besteel Co vs. Rorze Systems
Performance |
| Timeline |
| Fine Besteel |
| Rorze Systems |
Fine Besteel and Rorze Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fine Besteel and Rorze Systems
The main advantage of trading using opposite Fine Besteel and Rorze Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fine Besteel position performs unexpectedly, Rorze Systems 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 Rorze Systems will offset losses from the drop in Rorze Systems' long position.| Fine Besteel vs. KB Financial Group | Fine Besteel vs. Shinhan Financial Group | Fine Besteel vs. Hana Financial | Fine Besteel vs. Woori Financial Group |
| Rorze Systems vs. Daejung Chemicals Metals | Rorze Systems vs. LG Household Healthcare | Rorze Systems vs. Iljin Display | Rorze Systems vs. Aprogen Healthcare Games |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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