Correlation Between Fine Besteel and GemVaxKAEL CoLtd
Can any of the company-specific risk be diversified away by investing in both Fine Besteel and GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd, you can compare the effects of market volatilities on Fine Besteel and GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fine Besteel and GemVaxKAEL CoLtd.
Diversification Opportunities for Fine Besteel and GemVaxKAEL CoLtd
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fine and GemVaxKAEL is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Fine Besteel Co and GemVaxKAEL CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GemVaxKAEL CoLtd has no effect on the direction of Fine Besteel i.e., Fine Besteel and GemVaxKAEL CoLtd go up and down completely randomly.
Pair Corralation between Fine Besteel and GemVaxKAEL CoLtd
Assuming the 90 days trading horizon Fine Besteel Co is expected to under-perform the GemVaxKAEL CoLtd. But the stock apears to be less risky and, when comparing its historical volatility, Fine Besteel Co is 1.5 times less risky than GemVaxKAEL CoLtd. The stock trades about -0.01 of its potential returns per unit of risk. The GemVaxKAEL CoLtd is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,484,000 in GemVaxKAEL CoLtd on September 1, 2024 and sell it today you would earn a total of 466,000 from holding GemVaxKAEL CoLtd or generate 31.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fine Besteel Co vs. GemVaxKAEL CoLtd
Performance |
| Timeline |
| Fine Besteel |
| GemVaxKAEL CoLtd |
Fine Besteel and GemVaxKAEL CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fine Besteel and GemVaxKAEL CoLtd
The main advantage of trading using opposite Fine Besteel and GemVaxKAEL CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fine Besteel position performs unexpectedly, GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd will offset losses from the drop in GemVaxKAEL CoLtd's long position.| Fine Besteel vs. AptaBio Therapeutics | Fine Besteel vs. Daewoo SBI SPAC | Fine Besteel vs. Dream Security co | Fine Besteel vs. Microfriend |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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