Correlation Between Investment and Fecon Mining
Can any of the company-specific risk be diversified away by investing in both Investment and Fecon Mining 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 Investment and Fecon Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investment and Industrial and Fecon Mining JSC, you can compare the effects of market volatilities on Investment and Fecon Mining 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 Investment with a short position of Fecon Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investment and Fecon Mining.
Diversification Opportunities for Investment and Fecon Mining
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Investment and Fecon is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Investment and Industrial and Fecon Mining JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fecon Mining JSC and Investment 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 Investment and Industrial are associated (or correlated) with Fecon Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fecon Mining JSC has no effect on the direction of Investment i.e., Investment and Fecon Mining go up and down completely randomly.
Pair Corralation between Investment and Fecon Mining
Assuming the 90 days trading horizon Investment and Industrial is expected to generate 0.37 times more return on investment than Fecon Mining. However, Investment and Industrial is 2.74 times less risky than Fecon Mining. It trades about 0.28 of its potential returns per unit of risk. Fecon Mining JSC is currently generating about 0.08 per unit of risk. If you would invest 6,700,000 in Investment and Industrial on October 12, 2024 and sell it today you would earn a total of 450,000 from holding Investment and Industrial or generate 6.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investment and Industrial vs. Fecon Mining JSC
Performance |
| Timeline |
| Investment and Industrial |
| Fecon Mining JSC |
Investment and Fecon Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investment and Fecon Mining
The main advantage of trading using opposite Investment and Fecon Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investment position performs unexpectedly, Fecon Mining 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 Fecon Mining will offset losses from the drop in Fecon Mining's long position.| Investment vs. PetroVietnam Transportation Corp | Investment vs. Elcom Technology Communications | Investment vs. Ducgiang Chemicals Detergent | Investment vs. Pacific Petroleum Transportation |
| Fecon Mining vs. Sao Ta Foods | Fecon Mining vs. Vinhomes JSC | Fecon Mining vs. BIDV Insurance Corp | Fecon Mining vs. Nafoods Group JSC |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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