Correlation Between Fine Metal and KC Metalsheet
Can any of the company-specific risk be diversified away by investing in both Fine Metal and KC Metalsheet 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 KC Metalsheet 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 KC Metalsheet Public, you can compare the effects of market volatilities on Fine Metal and KC Metalsheet 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 KC Metalsheet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fine Metal and KC Metalsheet.
Diversification Opportunities for Fine Metal and KC Metalsheet
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fine and KCM is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Fine Metal Technologies and KC Metalsheet Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KC Metalsheet Public 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 KC Metalsheet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KC Metalsheet Public has no effect on the direction of Fine Metal i.e., Fine Metal and KC Metalsheet go up and down completely randomly.
Pair Corralation between Fine Metal and KC Metalsheet
Assuming the 90 days trading horizon Fine Metal Technologies is expected to generate 1.0 times more return on investment than KC Metalsheet. However, Fine Metal Technologies is 1.0 times less risky than KC Metalsheet. It trades about 0.06 of its potential returns per unit of risk. KC Metalsheet Public is currently generating about 0.06 per unit of risk. If you would invest 3,241 in Fine Metal Technologies on August 29, 2024 and sell it today you would earn a total of 109.00 from holding Fine Metal Technologies or generate 3.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fine Metal Technologies vs. KC Metalsheet Public
Performance |
| Timeline |
| Fine Metal Technologies |
| KC Metalsheet Public |
Fine Metal and KC Metalsheet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fine Metal and KC Metalsheet
The main advantage of trading using opposite Fine Metal and KC Metalsheet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fine Metal position performs unexpectedly, KC Metalsheet 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 KC Metalsheet will offset losses from the drop in KC Metalsheet'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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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