Correlation Between Mekong Fisheries and Foreign Trade
Can any of the company-specific risk be diversified away by investing in both Mekong Fisheries and Foreign Trade 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 Mekong Fisheries and Foreign Trade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mekong Fisheries JSC and Foreign Trade Development, you can compare the effects of market volatilities on Mekong Fisheries and Foreign Trade 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 Mekong Fisheries with a short position of Foreign Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mekong Fisheries and Foreign Trade.
Diversification Opportunities for Mekong Fisheries and Foreign Trade
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mekong and Foreign is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Mekong Fisheries JSC and Foreign Trade Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foreign Trade Development and Mekong Fisheries 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 Mekong Fisheries JSC are associated (or correlated) with Foreign Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foreign Trade Development has no effect on the direction of Mekong Fisheries i.e., Mekong Fisheries and Foreign Trade go up and down completely randomly.
Pair Corralation between Mekong Fisheries and Foreign Trade
Assuming the 90 days trading horizon Mekong Fisheries JSC is expected to under-perform the Foreign Trade. But the stock apears to be less risky and, when comparing its historical volatility, Mekong Fisheries JSC is 2.04 times less risky than Foreign Trade. The stock trades about -0.04 of its potential returns per unit of risk. The Foreign Trade Development is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,960,000 in Foreign Trade Development on August 24, 2024 and sell it today you would lose (360,000) from holding Foreign Trade Development or give up 18.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 61.4% |
| Values | Daily Returns |
Mekong Fisheries JSC vs. Foreign Trade Development
Performance |
| Timeline |
| Mekong Fisheries JSC |
| Foreign Trade Development |
Mekong Fisheries and Foreign Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mekong Fisheries and Foreign Trade
The main advantage of trading using opposite Mekong Fisheries and Foreign Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mekong Fisheries position performs unexpectedly, Foreign Trade 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 Foreign Trade will offset losses from the drop in Foreign Trade's long position.| Mekong Fisheries vs. FIT INVEST JSC | Mekong Fisheries vs. Damsan JSC | Mekong Fisheries vs. An Phat Plastic | Mekong Fisheries vs. APG Securities Joint |
| Foreign Trade vs. FIT INVEST JSC | Foreign Trade vs. Damsan JSC | Foreign Trade vs. An Phat Plastic | Foreign Trade vs. APG Securities Joint |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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