Correlation Between FineMat Applied and Good Finance
Can any of the company-specific risk be diversified away by investing in both FineMat Applied and Good Finance 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 Good Finance 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 Good Finance Securities, you can compare the effects of market volatilities on FineMat Applied and Good Finance 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 Good Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of FineMat Applied and Good Finance.
Diversification Opportunities for FineMat Applied and Good Finance
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FineMat and Good is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding FineMat Applied Materials and Good Finance Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Good Finance Securities 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 Good Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Good Finance Securities has no effect on the direction of FineMat Applied i.e., FineMat Applied and Good Finance go up and down completely randomly.
Pair Corralation between FineMat Applied and Good Finance
Assuming the 90 days trading horizon FineMat Applied is expected to generate 1.02 times less return on investment than Good Finance. In addition to that, FineMat Applied is 1.49 times more volatile than Good Finance Securities. It trades about 0.02 of its total potential returns per unit of risk. Good Finance Securities is currently generating about 0.04 per unit of volatility. If you would invest 1,845 in Good Finance Securities on October 25, 2024 and sell it today you would earn a total of 555.00 from holding Good Finance Securities or generate 30.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FineMat Applied Materials vs. Good Finance Securities
Performance |
| Timeline |
| FineMat Applied Materials |
| Good Finance Securities |
FineMat Applied and Good Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FineMat Applied and Good Finance
The main advantage of trading using opposite FineMat Applied and Good Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FineMat Applied position performs unexpectedly, Good Finance 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 Good Finance will offset losses from the drop in Good Finance's long position.| FineMat Applied vs. Solomon Technology Corp | FineMat Applied vs. Chant Sincere Co | FineMat Applied vs. CviLux Corp | FineMat Applied vs. Shenmao Technology |
| Good Finance vs. Ever Clear Environmental Eng | Good Finance vs. Quintain Steel Co | Good Finance vs. Chung Hung Steel | Good Finance vs. Standard Foods Corp |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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