Correlation Between Fecon Mining and Industrial Urban
Can any of the company-specific risk be diversified away by investing in both Fecon Mining and Industrial Urban 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 Fecon Mining and Industrial Urban into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fecon Mining JSC and Industrial Urban Development, you can compare the effects of market volatilities on Fecon Mining and Industrial Urban 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 Fecon Mining with a short position of Industrial Urban. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fecon Mining and Industrial Urban.
Diversification Opportunities for Fecon Mining and Industrial Urban
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fecon and Industrial is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Fecon Mining JSC and Industrial Urban Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Urban Dev and Fecon Mining 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 Fecon Mining JSC are associated (or correlated) with Industrial Urban. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial Urban Dev has no effect on the direction of Fecon Mining i.e., Fecon Mining and Industrial Urban go up and down completely randomly.
Pair Corralation between Fecon Mining and Industrial Urban
Assuming the 90 days trading horizon Fecon Mining JSC is expected to under-perform the Industrial Urban. But the stock apears to be less risky and, when comparing its historical volatility, Fecon Mining JSC is 1.29 times less risky than Industrial Urban. The stock trades about -0.02 of its potential returns per unit of risk. The Industrial Urban Development is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,802,397 in Industrial Urban Development on August 31, 2024 and sell it today you would earn a total of 1,412,603 from holding Industrial Urban Development or generate 78.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fecon Mining JSC vs. Industrial Urban Development
Performance |
| Timeline |
| Fecon Mining JSC |
| Industrial Urban Dev |
Fecon Mining and Industrial Urban Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fecon Mining and Industrial Urban
The main advantage of trading using opposite Fecon Mining and Industrial Urban positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fecon Mining position performs unexpectedly, Industrial Urban 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 Industrial Urban will offset losses from the drop in Industrial Urban's long position.| Fecon Mining vs. PVI Reinsurance Corp | Fecon Mining vs. PetroVietnam Drilling Well | Fecon Mining vs. Petrolimex Petrochemical JSC | Fecon Mining vs. Hochiminh City Metal |
| Industrial Urban vs. FIT INVEST JSC | Industrial Urban vs. Damsan JSC | Industrial Urban vs. An Phat Plastic | Industrial Urban 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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