Correlation Between Access Bio and Finebesteel
Can any of the company-specific risk be diversified away by investing in both Access Bio 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 Access Bio and Finebesteel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Access Bio and Finebesteel, you can compare the effects of market volatilities on Access Bio 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 Access Bio with a short position of Finebesteel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Access Bio and Finebesteel.
Diversification Opportunities for Access Bio and Finebesteel
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Access and Finebesteel is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Access Bio and Finebesteel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finebesteel and Access Bio 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 Access Bio 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 Access Bio i.e., Access Bio and Finebesteel go up and down completely randomly.
Pair Corralation between Access Bio and Finebesteel
Assuming the 90 days trading horizon Access Bio is expected to generate 3.06 times less return on investment than Finebesteel. In addition to that, Access Bio is 1.89 times more volatile than Finebesteel. It trades about 0.05 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Access Bio vs. Finebesteel
Performance |
| Timeline |
| Access Bio |
| Finebesteel |
Access Bio and Finebesteel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Access Bio and Finebesteel
The main advantage of trading using opposite Access Bio and Finebesteel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Access Bio 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.| Access Bio vs. Korea Petro Chemical | Access Bio vs. Cuckoo Electronics Co | Access Bio vs. Kyung In Synthetic Corp | Access Bio vs. ABCO Electronics Co |
| 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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