Correlation Between Finebesteel and Insun Environment
Can any of the company-specific risk be diversified away by investing in both Finebesteel and Insun Environment 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 Insun Environment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finebesteel and Insun Environment New, you can compare the effects of market volatilities on Finebesteel and Insun Environment 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 Insun Environment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finebesteel and Insun Environment.
Diversification Opportunities for Finebesteel and Insun Environment
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Finebesteel and Insun is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Finebesteel and Insun Environment New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insun Environment New 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 Insun Environment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insun Environment New has no effect on the direction of Finebesteel i.e., Finebesteel and Insun Environment go up and down completely randomly.
Pair Corralation between Finebesteel and Insun Environment
Assuming the 90 days trading horizon Finebesteel is expected to generate 1.26 times more return on investment than Insun Environment. However, Finebesteel is 1.26 times more volatile than Insun Environment New. It trades about 0.1 of its potential returns per unit of risk. Insun Environment New is currently generating about -0.04 per unit of risk. If you would invest 84,000 in Finebesteel on September 24, 2024 and sell it today you would earn a total of 16,700 from holding Finebesteel or generate 19.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Finebesteel vs. Insun Environment New
Performance |
Timeline |
Finebesteel |
Insun Environment New |
Finebesteel and Insun Environment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Finebesteel and Insun Environment
The main advantage of trading using opposite Finebesteel and Insun Environment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finebesteel position performs unexpectedly, Insun Environment 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 Insun Environment will offset losses from the drop in Insun Environment'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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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