Correlation Between Microfriend and BooKook Steel
Can any of the company-specific risk be diversified away by investing in both Microfriend and BooKook Steel 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 Microfriend and BooKook Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microfriend and BooKook Steel Co, you can compare the effects of market volatilities on Microfriend and BooKook Steel 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 Microfriend with a short position of BooKook Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microfriend and BooKook Steel.
Diversification Opportunities for Microfriend and BooKook Steel
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Microfriend and BooKook is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Microfriend and BooKook Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BooKook Steel and Microfriend 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 Microfriend are associated (or correlated) with BooKook Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BooKook Steel has no effect on the direction of Microfriend i.e., Microfriend and BooKook Steel go up and down completely randomly.
Pair Corralation between Microfriend and BooKook Steel
Assuming the 90 days trading horizon Microfriend is expected to generate 4.48 times more return on investment than BooKook Steel. However, Microfriend is 4.48 times more volatile than BooKook Steel Co. It trades about 0.0 of its potential returns per unit of risk. BooKook Steel Co is currently generating about -0.07 per unit of risk. If you would invest 337,500 in Microfriend on September 2, 2024 and sell it today you would lose (30,000) from holding Microfriend or give up 8.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microfriend vs. BooKook Steel Co
Performance |
| Timeline |
| Microfriend |
| BooKook Steel |
Microfriend and BooKook Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microfriend and BooKook Steel
The main advantage of trading using opposite Microfriend and BooKook Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microfriend position performs unexpectedly, BooKook Steel 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 BooKook Steel will offset losses from the drop in BooKook Steel's long position.| Microfriend vs. SK Hynix | Microfriend vs. LX Semicon Co | Microfriend vs. People Technology | Microfriend vs. SIMMTECH Co |
| BooKook Steel vs. AptaBio Therapeutics | BooKook Steel vs. Daewoo SBI SPAC | BooKook Steel vs. Dream Security co | BooKook Steel 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Commodity Directory Find actively traded commodities issued by global exchanges |