Correlation Between Viettel Construction and Fecon Mining
Can any of the company-specific risk be diversified away by investing in both Viettel Construction 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 Viettel Construction and Fecon Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viettel Construction JSC and Fecon Mining JSC, you can compare the effects of market volatilities on Viettel Construction 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 Viettel Construction with a short position of Fecon Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viettel Construction and Fecon Mining.
Diversification Opportunities for Viettel Construction and Fecon Mining
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Viettel and Fecon is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Viettel Construction JSC 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 Viettel Construction 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 Viettel Construction JSC 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 Viettel Construction i.e., Viettel Construction and Fecon Mining go up and down completely randomly.
Pair Corralation between Viettel Construction and Fecon Mining
Assuming the 90 days trading horizon Viettel Construction JSC is expected to generate 1.16 times more return on investment than Fecon Mining. However, Viettel Construction is 1.16 times more volatile than Fecon Mining JSC. It trades about 0.09 of its potential returns per unit of risk. Fecon Mining JSC is currently generating about -0.02 per unit of risk. If you would invest 5,907,943 in Viettel Construction JSC on August 24, 2024 and sell it today you would earn a total of 5,982,057 from holding Viettel Construction JSC or generate 101.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viettel Construction JSC vs. Fecon Mining JSC
Performance |
| Timeline |
| Viettel Construction JSC |
| Fecon Mining JSC |
Viettel Construction and Fecon Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viettel Construction and Fecon Mining
The main advantage of trading using opposite Viettel Construction and Fecon Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viettel Construction 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.| Viettel Construction vs. Fecon Mining JSC | Viettel Construction vs. Post and Telecommunications | Viettel Construction vs. Elcom Technology Communications | Viettel Construction vs. Military Insurance Corp |
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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 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.
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