Correlation Between Fine Besteel and Sungwoo Electronics
Can any of the company-specific risk be diversified away by investing in both Fine Besteel and Sungwoo Electronics 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 Sungwoo Electronics 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 Sungwoo Electronics Co, you can compare the effects of market volatilities on Fine Besteel and Sungwoo Electronics 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 Sungwoo Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fine Besteel and Sungwoo Electronics.
Diversification Opportunities for Fine Besteel and Sungwoo Electronics
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fine and Sungwoo is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Fine Besteel Co and Sungwoo Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sungwoo Electronics 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 Sungwoo Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sungwoo Electronics has no effect on the direction of Fine Besteel i.e., Fine Besteel and Sungwoo Electronics go up and down completely randomly.
Pair Corralation between Fine Besteel and Sungwoo Electronics
Assuming the 90 days trading horizon Fine Besteel Co is expected to generate 1.93 times more return on investment than Sungwoo Electronics. However, Fine Besteel is 1.93 times more volatile than Sungwoo Electronics Co. It trades about 0.3 of its potential returns per unit of risk. Sungwoo Electronics Co is currently generating about -0.2 per unit of risk. If you would invest 84,000 in Fine Besteel Co on August 29, 2024 and sell it today you would earn a total of 28,200 from holding Fine Besteel Co or generate 33.57% 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. Sungwoo Electronics Co
Performance |
| Timeline |
| Fine Besteel |
| Sungwoo Electronics |
Fine Besteel and Sungwoo Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fine Besteel and Sungwoo Electronics
The main advantage of trading using opposite Fine Besteel and Sungwoo Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fine Besteel position performs unexpectedly, Sungwoo Electronics 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 Sungwoo Electronics will offset losses from the drop in Sungwoo Electronics' long position.| Fine Besteel vs. Raontech | Fine Besteel vs. Yura Tech Co | Fine Besteel vs. FNSTech Co | Fine Besteel vs. CU Tech Corp |
| Sungwoo Electronics vs. AptaBio Therapeutics | Sungwoo Electronics vs. Daewoo SBI SPAC | Sungwoo Electronics vs. Dream Security co | Sungwoo Electronics vs. Microfriend |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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