Correlation Between Fine Besteel and Air Busan
Can any of the company-specific risk be diversified away by investing in both Fine Besteel and Air Busan 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 Air Busan 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 Air Busan Co, you can compare the effects of market volatilities on Fine Besteel and Air Busan 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 Air Busan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fine Besteel and Air Busan.
Diversification Opportunities for Fine Besteel and Air Busan
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fine and Air is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Fine Besteel Co and Air Busan Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Busan 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 Air Busan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Busan has no effect on the direction of Fine Besteel i.e., Fine Besteel and Air Busan go up and down completely randomly.
Pair Corralation between Fine Besteel and Air Busan
Assuming the 90 days trading horizon Fine Besteel Co is expected to generate 1.86 times more return on investment than Air Busan. However, Fine Besteel is 1.86 times more volatile than Air Busan Co. It trades about 0.3 of its potential returns per unit of risk. Air Busan Co is currently generating about 0.07 per unit of risk. If you would invest 94,700 in Fine Besteel Co on November 9, 2024 and sell it today you would earn a total of 17,300 from holding Fine Besteel Co or generate 18.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fine Besteel Co vs. Air Busan Co
Performance |
| Timeline |
| Fine Besteel |
| Air Busan |
Fine Besteel and Air Busan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fine Besteel and Air Busan
The main advantage of trading using opposite Fine Besteel and Air Busan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fine Besteel position performs unexpectedly, Air Busan 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 Air Busan will offset losses from the drop in Air Busan's long position.| Fine Besteel vs. Vina Technology Co | Fine Besteel vs. Digital Imaging Technology | Fine Besteel vs. HB Technology TD | Fine Besteel vs. Hannong Chemicals |
| Air Busan vs. Top Material Co | Air Busan vs. Wonil Special Steel | Air Busan vs. Han Kook Steel | Air Busan vs. Hana Materials |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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