Correlation Between Fine Besteel and Raontech
Can any of the company-specific risk be diversified away by investing in both Fine Besteel and Raontech 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 Raontech 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 Raontech, you can compare the effects of market volatilities on Fine Besteel and Raontech 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 Raontech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fine Besteel and Raontech.
Diversification Opportunities for Fine Besteel and Raontech
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fine and Raontech is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Fine Besteel Co and Raontech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raontech 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 Raontech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raontech has no effect on the direction of Fine Besteel i.e., Fine Besteel and Raontech go up and down completely randomly.
Pair Corralation between Fine Besteel and Raontech
Assuming the 90 days trading horizon Fine Besteel Co is expected to generate 0.78 times more return on investment than Raontech. However, Fine Besteel Co is 1.29 times less risky than Raontech. It trades about -0.07 of its potential returns per unit of risk. Raontech is currently generating about -0.08 per unit of risk. If you would invest 247,000 in Fine Besteel Co on August 31, 2024 and sell it today you would lose (142,300) from holding Fine Besteel Co or give up 57.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fine Besteel Co vs. Raontech
Performance |
| Timeline |
| Fine Besteel |
| Raontech |
Fine Besteel and Raontech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fine Besteel and Raontech
The main advantage of trading using opposite Fine Besteel and Raontech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fine Besteel position performs unexpectedly, Raontech 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 Raontech will offset losses from the drop in Raontech's long position.| Fine Besteel vs. Dongil Technology | Fine Besteel vs. PJ Metal Co | Fine Besteel vs. MetaLabs Co | Fine Besteel vs. Daou Technology |
| Raontech vs. Samsung Electronics Co | Raontech vs. Samsung Electronics Co | Raontech vs. LG Energy Solution | Raontech vs. SK Hynix |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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