Correlation Between Daishin Balance and Finebesteel
Can any of the company-specific risk be diversified away by investing in both Daishin Balance 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 Daishin Balance and Finebesteel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daishin Balance No8 and Finebesteel, you can compare the effects of market volatilities on Daishin Balance 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 Daishin Balance with a short position of Finebesteel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daishin Balance and Finebesteel.
Diversification Opportunities for Daishin Balance and Finebesteel
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Daishin and Finebesteel is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Daishin Balance No8 and Finebesteel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finebesteel and Daishin Balance 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 Daishin Balance No8 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 Daishin Balance i.e., Daishin Balance and Finebesteel go up and down completely randomly.
Pair Corralation between Daishin Balance and Finebesteel
Assuming the 90 days trading horizon Daishin Balance No8 is expected to under-perform the Finebesteel. In addition to that, Daishin Balance is 1.24 times more volatile than Finebesteel. It trades about -0.13 of its total potential returns per unit of risk. Finebesteel is currently generating about -0.01 per unit of volatility. If you would invest 114,800 in Finebesteel on August 24, 2024 and sell it today you would lose (9,700) from holding Finebesteel or give up 8.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daishin Balance No8 vs. Finebesteel
Performance |
| Timeline |
| Daishin Balance No8 |
| Finebesteel |
Daishin Balance and Finebesteel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daishin Balance and Finebesteel
The main advantage of trading using opposite Daishin Balance and Finebesteel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daishin Balance 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.| Daishin Balance vs. Shinil Electronics Co | Daishin Balance vs. Daejoo Electronic Materials | Daishin Balance vs. Okins Electronics Co | Daishin Balance vs. DONGKUK TED METAL |
| Finebesteel vs. DC Media Co | Finebesteel vs. CU Tech Corp | Finebesteel vs. MediaZen | Finebesteel vs. Alton Sports 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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