Correlation Between Ducgiang Chemicals and Fecon Mining
Can any of the company-specific risk be diversified away by investing in both Ducgiang Chemicals 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 Ducgiang Chemicals and Fecon Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ducgiang Chemicals Detergent and Fecon Mining JSC, you can compare the effects of market volatilities on Ducgiang Chemicals 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 Ducgiang Chemicals with a short position of Fecon Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ducgiang Chemicals and Fecon Mining.
Diversification Opportunities for Ducgiang Chemicals and Fecon Mining
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ducgiang and Fecon is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Ducgiang Chemicals Detergent 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 Ducgiang Chemicals 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 Ducgiang Chemicals Detergent 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 Ducgiang Chemicals i.e., Ducgiang Chemicals and Fecon Mining go up and down completely randomly.
Pair Corralation between Ducgiang Chemicals and Fecon Mining
Assuming the 90 days trading horizon Ducgiang Chemicals Detergent is expected to under-perform the Fecon Mining. But the stock apears to be less risky and, when comparing its historical volatility, Ducgiang Chemicals Detergent is 3.51 times less risky than Fecon Mining. The stock trades about -0.2 of its potential returns per unit of risk. The Fecon Mining JSC is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 316,000 in Fecon Mining JSC on October 12, 2024 and sell it today you would earn a total of 14,000 from holding Fecon Mining JSC or generate 4.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ducgiang Chemicals Detergent vs. Fecon Mining JSC
Performance |
| Timeline |
| Ducgiang Chemicals |
| Fecon Mining JSC |
Ducgiang Chemicals and Fecon Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ducgiang Chemicals and Fecon Mining
The main advantage of trading using opposite Ducgiang Chemicals and Fecon Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ducgiang Chemicals 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.| Ducgiang Chemicals vs. Danang Education Investment | Ducgiang Chemicals vs. Vina2 Investment and | Ducgiang Chemicals vs. Dinhvu Port Investment | Ducgiang Chemicals vs. Riverway Management JSC |
| 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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