Correlation Between Fecon Mining and Vietnam Rubber
Can any of the company-specific risk be diversified away by investing in both Fecon Mining and Vietnam Rubber 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 Vietnam Rubber 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 Vietnam Rubber Group, you can compare the effects of market volatilities on Fecon Mining and Vietnam Rubber 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 Vietnam Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fecon Mining and Vietnam Rubber.
Diversification Opportunities for Fecon Mining and Vietnam Rubber
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fecon and Vietnam is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Fecon Mining JSC and Vietnam Rubber Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Rubber Group 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 Vietnam Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Rubber Group has no effect on the direction of Fecon Mining i.e., Fecon Mining and Vietnam Rubber go up and down completely randomly.
Pair Corralation between Fecon Mining and Vietnam Rubber
Assuming the 90 days trading horizon Fecon Mining JSC is expected to generate 2.51 times more return on investment than Vietnam Rubber. However, Fecon Mining is 2.51 times more volatile than Vietnam Rubber Group. It trades about 0.12 of its potential returns per unit of risk. Vietnam Rubber Group is currently generating about -0.25 per unit of risk. If you would invest 307,000 in Fecon Mining JSC on October 22, 2024 and sell it today you would earn a total of 22,000 from holding Fecon Mining JSC or generate 7.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Fecon Mining JSC vs. Vietnam Rubber Group
Performance |
| Timeline |
| Fecon Mining JSC |
| Vietnam Rubber Group |
Fecon Mining and Vietnam Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fecon Mining and Vietnam Rubber
The main advantage of trading using opposite Fecon Mining and Vietnam Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fecon Mining position performs unexpectedly, Vietnam Rubber 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 Vietnam Rubber will offset losses from the drop in Vietnam Rubber's long position.| Fecon Mining vs. Pacific Petroleum Transportation | Fecon Mining vs. DIC Holdings Construction | Fecon Mining vs. Saigon Viendong Technology | Fecon Mining vs. Visicons Construction and |
| Vietnam Rubber vs. Din Capital Investment | Vietnam Rubber vs. Saigon Beer Alcohol | Vietnam Rubber vs. Tien Giang Investment | Vietnam Rubber vs. Bao Ngoc Investment |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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