Correlation Between SIMMTECH and Finebesteel
Can any of the company-specific risk be diversified away by investing in both SIMMTECH and Finebesteel 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 SIMMTECH and Finebesteel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIMMTECH Co and Finebesteel, you can compare the effects of market volatilities on SIMMTECH and Finebesteel 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 SIMMTECH with a short position of Finebesteel. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIMMTECH and Finebesteel.
Diversification Opportunities for SIMMTECH and Finebesteel
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SIMMTECH and Finebesteel is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding SIMMTECH Co and Finebesteel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finebesteel and SIMMTECH 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 SIMMTECH Co are associated (or correlated) with Finebesteel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finebesteel has no effect on the direction of SIMMTECH i.e., SIMMTECH and Finebesteel go up and down completely randomly.
Pair Corralation between SIMMTECH and Finebesteel
Assuming the 90 days trading horizon SIMMTECH is expected to generate 1.19 times less return on investment than Finebesteel. In addition to that, SIMMTECH is 1.22 times more volatile than Finebesteel. It trades about 0.19 of its total potential returns per unit of risk. Finebesteel is currently generating about 0.28 per unit of volatility. If you would invest 91,900 in Finebesteel on November 3, 2024 and sell it today you would earn a total of 14,600 from holding Finebesteel or generate 15.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIMMTECH Co vs. Finebesteel
Performance |
| Timeline |
| SIMMTECH |
| Finebesteel |
SIMMTECH and Finebesteel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIMMTECH and Finebesteel
The main advantage of trading using opposite SIMMTECH and Finebesteel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIMMTECH position performs unexpectedly, Finebesteel 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 Finebesteel will offset losses from the drop in Finebesteel's long position.| SIMMTECH vs. Global Standard Technology | SIMMTECH vs. Hyundai BNG Steel | SIMMTECH vs. Woori Technology | SIMMTECH vs. iNtRON Biotechnology |
| Finebesteel vs. SK Telecom Co | Finebesteel vs. Daou Data Corp | Finebesteel vs. SCI Information Service | Finebesteel vs. Inzi Display 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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