Correlation Between Hanoi Beer and Fecon Mining
Can any of the company-specific risk be diversified away by investing in both Hanoi Beer 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 Hanoi Beer and Fecon Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanoi Beer Alcohol and Fecon Mining JSC, you can compare the effects of market volatilities on Hanoi Beer 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 Hanoi Beer with a short position of Fecon Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanoi Beer and Fecon Mining.
Diversification Opportunities for Hanoi Beer and Fecon Mining
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hanoi and Fecon is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Hanoi Beer Alcohol 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 Hanoi Beer 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 Hanoi Beer Alcohol 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 Hanoi Beer i.e., Hanoi Beer and Fecon Mining go up and down completely randomly.
Pair Corralation between Hanoi Beer and Fecon Mining
Assuming the 90 days trading horizon Hanoi Beer Alcohol is expected to under-perform the Fecon Mining. But the stock apears to be less risky and, when comparing its historical volatility, Hanoi Beer Alcohol is 1.43 times less risky than Fecon Mining. The stock trades about -0.01 of its potential returns per unit of risk. The Fecon Mining JSC is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 365,000 in Fecon Mining JSC on September 4, 2024 and sell it today you would lose (56,000) from holding Fecon Mining JSC or give up 15.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.5% |
| Values | Daily Returns |
Hanoi Beer Alcohol vs. Fecon Mining JSC
Performance |
| Timeline |
| Hanoi Beer Alcohol |
| Fecon Mining JSC |
Hanoi Beer and Fecon Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanoi Beer and Fecon Mining
The main advantage of trading using opposite Hanoi Beer and Fecon Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanoi Beer 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.| Hanoi Beer vs. FIT INVEST JSC | Hanoi Beer vs. Damsan JSC | Hanoi Beer vs. An Phat Plastic | Hanoi Beer vs. Alphanam ME |
| Fecon Mining vs. FIT INVEST JSC | Fecon Mining vs. Damsan JSC | Fecon Mining vs. An Phat Plastic | Fecon Mining vs. Alphanam ME |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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