Correlation Between Fine Besteel and Incar Financial
Can any of the company-specific risk be diversified away by investing in both Fine Besteel and Incar Financial 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 Incar Financial 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 Incar Financial Service, you can compare the effects of market volatilities on Fine Besteel and Incar Financial 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 Incar Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fine Besteel and Incar Financial.
Diversification Opportunities for Fine Besteel and Incar Financial
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fine and Incar is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Fine Besteel Co and Incar Financial Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Incar Financial Service 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 Incar Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Incar Financial Service has no effect on the direction of Fine Besteel i.e., Fine Besteel and Incar Financial go up and down completely randomly.
Pair Corralation between Fine Besteel and Incar Financial
Assuming the 90 days trading horizon Fine Besteel Co is expected to generate 1.09 times more return on investment than Incar Financial. However, Fine Besteel is 1.09 times more volatile than Incar Financial Service. It trades about 0.28 of its potential returns per unit of risk. Incar Financial Service is currently generating about 0.06 per unit of risk. If you would invest 91,900 in Fine Besteel Co on November 3, 2024 and sell it today you would earn a total of 14,600 from holding Fine Besteel Co or generate 15.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fine Besteel Co vs. Incar Financial Service
Performance |
| Timeline |
| Fine Besteel |
| Incar Financial Service |
Fine Besteel and Incar Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fine Besteel and Incar Financial
The main advantage of trading using opposite Fine Besteel and Incar Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fine Besteel position performs unexpectedly, Incar Financial 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 Incar Financial will offset losses from the drop in Incar Financial's long position.| Fine Besteel vs. Nh Investment And | Fine Besteel vs. Kakao Games Corp | Fine Besteel vs. DB Financial Investment | Fine Besteel vs. Korean Drug Co |
| Incar Financial vs. BGF Retail Co | Incar Financial vs. Jeong Moon Information | Incar Financial vs. Digital Power Communications | Incar Financial vs. Echomarketing CoLtd |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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