Correlation Between Everland Investment and Fecon Mining
Can any of the company-specific risk be diversified away by investing in both Everland 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 Everland 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 Everland Investment JSC and Fecon Mining JSC, you can compare the effects of market volatilities on Everland 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 Everland Investment with a short position of Fecon Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Everland Investment and Fecon Mining.
Diversification Opportunities for Everland Investment and Fecon Mining
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Everland and Fecon is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Everland Investment 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 Everland 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 Everland Investment 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 Everland Investment i.e., Everland Investment and Fecon Mining go up and down completely randomly.
Pair Corralation between Everland Investment and Fecon Mining
Assuming the 90 days trading horizon Everland Investment JSC is expected to generate 1.89 times more return on investment than Fecon Mining. However, Everland Investment is 1.89 times more volatile than Fecon Mining JSC. It trades about -0.01 of its potential returns per unit of risk. Fecon Mining JSC is currently generating about -0.14 per unit of risk. If you would invest 710,000 in Everland Investment JSC on September 3, 2024 and sell it today you would lose (61,000) from holding Everland Investment JSC or give up 8.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Everland Investment JSC vs. Fecon Mining JSC
Performance |
| Timeline |
| Everland Investment JSC |
| Fecon Mining JSC |
Everland Investment and Fecon Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Everland Investment and Fecon Mining
The main advantage of trading using opposite Everland Investment and Fecon Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everland 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.| Everland Investment vs. FIT INVEST JSC | Everland Investment vs. Damsan JSC | Everland Investment vs. An Phat Plastic | Everland Investment 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 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.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |