Correlation Between SSR and Finebesteel
Can any of the company-specific risk be diversified away by investing in both SSR 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 SSR and Finebesteel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SSR Inc and Finebesteel, you can compare the effects of market volatilities on SSR 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 SSR with a short position of Finebesteel. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSR and Finebesteel.
Diversification Opportunities for SSR and Finebesteel
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between SSR and Finebesteel is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding SSR Inc and Finebesteel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finebesteel and SSR 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 SSR Inc 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 SSR i.e., SSR and Finebesteel go up and down completely randomly.
Pair Corralation between SSR and Finebesteel
Assuming the 90 days trading horizon SSR is expected to generate 3.63 times less return on investment than Finebesteel. But when comparing it to its historical volatility, SSR Inc is 5.0 times less risky than Finebesteel. It trades about 0.35 of its potential returns per unit of risk. Finebesteel is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 85,400 in Finebesteel on August 25, 2024 and sell it today you would earn a total of 22,800 from holding Finebesteel or generate 26.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSR Inc vs. Finebesteel
Performance |
| Timeline |
| SSR Inc |
| Finebesteel |
SSR and Finebesteel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSR and Finebesteel
The main advantage of trading using opposite SSR and Finebesteel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSR 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.| SSR vs. Dongbu Insurance Co | SSR vs. Ilji Technology Co | SSR vs. Dongil Metal Co | SSR vs. Guyoung Technology Co |
| Finebesteel vs. InnoTherapy | Finebesteel vs. Guyoung Technology Co | Finebesteel vs. Infinitt Healthcare Co | Finebesteel vs. Seoyon Topmetal Co |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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