Correlation Between KBSTAR 200TR and Finebesteel

Can any of the company-specific risk be diversified away by investing in both KBSTAR 200TR 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 KBSTAR 200TR and Finebesteel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KBSTAR 200TR and Finebesteel, you can compare the effects of market volatilities on KBSTAR 200TR 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 KBSTAR 200TR with a short position of Finebesteel. Check out your portfolio center. Please also check ongoing floating volatility patterns of KBSTAR 200TR and Finebesteel.

Diversification Opportunities for KBSTAR 200TR and Finebesteel

-0.23

Correlation Coefficient

KBSTAR 200TR  Finebesteel

Very good diversification

The 3 months correlation between KBSTAR and Finebesteel is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding KBSTAR 200TR and Finebesteel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finebesteel and KBSTAR 200TR 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 KBSTAR 200TR 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 KBSTAR 200TR i.e., KBSTAR 200TR and Finebesteel go up and down completely randomly.

Pair Corralation between KBSTAR 200TR and Finebesteel

Assuming the 90 days trading horizon KBSTAR 200TR is expected to under-perform the Finebesteel. But the etf apears to be less risky and, when comparing its historical volatility, KBSTAR 200TR is 2.8 times less risky than Finebesteel. The etf trades about -0.11 of its potential returns per unit of risk. The Finebesteel is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  93,100  in Finebesteel on August 30, 2024 and sell it today you would earn a total of  14,200  from holding Finebesteel or generate 15.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

KBSTAR 200TR  vs.  Finebesteel

KBSTAR 200TR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KBSTAR 200TR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Finebesteel

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Finebesteel are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Finebesteel sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KBSTAR 200TR and Finebesteel

The main advantage of trading using opposite KBSTAR 200TR and Finebesteel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KBSTAR 200TR 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.

The idea behind KBSTAR 200TR and Finebesteel pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.