Correlation Between FineMat Applied and S Tech
Can any of the company-specific risk be diversified away by investing in both FineMat Applied and S Tech 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 FineMat Applied and S Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FineMat Applied Materials and S Tech Corp, you can compare the effects of market volatilities on FineMat Applied and S Tech 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 FineMat Applied with a short position of S Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of FineMat Applied and S Tech.
Diversification Opportunities for FineMat Applied and S Tech
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FineMat and 1584 is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding FineMat Applied Materials and S Tech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on S Tech Corp and FineMat Applied 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 FineMat Applied Materials are associated (or correlated) with S Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of S Tech Corp has no effect on the direction of FineMat Applied i.e., FineMat Applied and S Tech go up and down completely randomly.
Pair Corralation between FineMat Applied and S Tech
Assuming the 90 days trading horizon FineMat Applied Materials is expected to under-perform the S Tech. In addition to that, FineMat Applied is 1.37 times more volatile than S Tech Corp. It trades about -0.22 of its total potential returns per unit of risk. S Tech Corp is currently generating about -0.16 per unit of volatility. If you would invest 3,285 in S Tech Corp on August 31, 2024 and sell it today you would lose (140.00) from holding S Tech Corp or give up 4.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FineMat Applied Materials vs. S Tech Corp
Performance |
| Timeline |
| FineMat Applied Materials |
| S Tech Corp |
FineMat Applied and S Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FineMat Applied and S Tech
The main advantage of trading using opposite FineMat Applied and S Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FineMat Applied position performs unexpectedly, S Tech 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 S Tech will offset losses from the drop in S Tech's long position.| FineMat Applied vs. Hon Hai Precision | FineMat Applied vs. Delta Electronics | FineMat Applied vs. LARGAN Precision Co | FineMat Applied vs. Yageo Corp |
| S Tech vs. Fulin Plastic Industry | S Tech vs. Asia Metal Industries | S Tech vs. Amulaire Thermal Technology | S Tech vs. FineMat Applied Materials |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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