Correlation Between Fine Metal and Hwa Fong
Can any of the company-specific risk be diversified away by investing in both Fine Metal and Hwa Fong 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 Fine Metal and Hwa Fong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fine Metal Technologies and Hwa Fong Rubber, you can compare the effects of market volatilities on Fine Metal and Hwa Fong 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 Fine Metal with a short position of Hwa Fong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fine Metal and Hwa Fong.
Diversification Opportunities for Fine Metal and Hwa Fong
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fine and Hwa is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fine Metal Technologies and Hwa Fong Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hwa Fong Rubber and Fine Metal 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 Fine Metal Technologies are associated (or correlated) with Hwa Fong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hwa Fong Rubber has no effect on the direction of Fine Metal i.e., Fine Metal and Hwa Fong go up and down completely randomly.
Pair Corralation between Fine Metal and Hwa Fong
Assuming the 90 days trading horizon Fine Metal Technologies is expected to generate 1.77 times more return on investment than Hwa Fong. However, Fine Metal is 1.77 times more volatile than Hwa Fong Rubber. It trades about -0.05 of its potential returns per unit of risk. Hwa Fong Rubber is currently generating about -0.2 per unit of risk. If you would invest 3,450 in Fine Metal Technologies on August 25, 2024 and sell it today you would lose (100.00) from holding Fine Metal Technologies or give up 2.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Fine Metal Technologies vs. Hwa Fong Rubber
Performance |
| Timeline |
| Fine Metal Technologies |
| Hwa Fong Rubber |
Fine Metal and Hwa Fong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fine Metal and Hwa Fong
The main advantage of trading using opposite Fine Metal and Hwa Fong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fine Metal position performs unexpectedly, Hwa Fong 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 Hwa Fong will offset losses from the drop in Hwa Fong's long position.| Fine Metal vs. GFPT Public | Fine Metal vs. Kulthorn Kirby Public | Fine Metal vs. Chumporn Palm Oil | Fine Metal vs. Haad Thip Public |
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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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