Correlation Between Finebesteel and Jeong Moon
Can any of the company-specific risk be diversified away by investing in both Finebesteel and Jeong Moon 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 Finebesteel and Jeong Moon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finebesteel and Jeong Moon Information, you can compare the effects of market volatilities on Finebesteel and Jeong Moon 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 Finebesteel with a short position of Jeong Moon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finebesteel and Jeong Moon.
Diversification Opportunities for Finebesteel and Jeong Moon
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Finebesteel and Jeong is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Finebesteel and Jeong Moon Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeong Moon Information and Finebesteel 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 Finebesteel are associated (or correlated) with Jeong Moon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeong Moon Information has no effect on the direction of Finebesteel i.e., Finebesteel and Jeong Moon go up and down completely randomly.
Pair Corralation between Finebesteel and Jeong Moon
Assuming the 90 days trading horizon Finebesteel is expected to generate 1.54 times more return on investment than Jeong Moon. However, Finebesteel is 1.54 times more volatile than Jeong Moon Information. It trades about 0.08 of its potential returns per unit of risk. Jeong Moon Information is currently generating about -0.1 per unit of risk. If you would invest 86,200 in Finebesteel on September 26, 2024 and sell it today you would earn a total of 12,300 from holding Finebesteel or generate 14.27% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Finebesteel vs. Jeong Moon Information
Performance |
Timeline |
Finebesteel |
Jeong Moon Information |
Finebesteel and Jeong Moon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Finebesteel and Jeong Moon
The main advantage of trading using opposite Finebesteel and Jeong Moon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finebesteel position performs unexpectedly, Jeong Moon 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 Jeong Moon will offset losses from the drop in Jeong Moon's long position.Finebesteel vs. Dong Il Steel | Finebesteel vs. Seah Steel Corp | Finebesteel vs. Ajusteel Co | Finebesteel vs. Ni Steel |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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