Correlation Between Fecon Mining and Ha Long
Can any of the company-specific risk be diversified away by investing in both Fecon Mining and Ha Long 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 Ha Long 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 Ha Long Investment, you can compare the effects of market volatilities on Fecon Mining and Ha Long 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 Ha Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fecon Mining and Ha Long.
Diversification Opportunities for Fecon Mining and Ha Long
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fecon and HID is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Fecon Mining JSC and Ha Long Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ha Long Investment 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 Ha Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ha Long Investment has no effect on the direction of Fecon Mining i.e., Fecon Mining and Ha Long go up and down completely randomly.
Pair Corralation between Fecon Mining and Ha Long
Assuming the 90 days trading horizon Fecon Mining JSC is expected to generate 1.02 times more return on investment than Ha Long. However, Fecon Mining is 1.02 times more volatile than Ha Long Investment. It trades about -0.01 of its potential returns per unit of risk. Ha Long Investment is currently generating about -0.02 per unit of risk. If you would invest 360,000 in Fecon Mining JSC on September 2, 2024 and sell it today you would lose (54,000) from holding Fecon Mining JSC or give up 15.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fecon Mining JSC vs. Ha Long Investment
Performance |
| Timeline |
| Fecon Mining JSC |
| Ha Long Investment |
Fecon Mining and Ha Long Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fecon Mining and Ha Long
The main advantage of trading using opposite Fecon Mining and Ha Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fecon Mining position performs unexpectedly, Ha Long 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 Ha Long will offset losses from the drop in Ha Long's long position.| Fecon Mining vs. Ha Long Investment | Fecon Mining vs. Everland Investment JSC | Fecon Mining vs. Hochiminh City Metal | Fecon Mining vs. Vu Dang Investment |
| Ha Long vs. Thanh Dat Investment | Ha Long vs. Dinhvu Port Investment | Ha Long vs. Vu Dang Investment | Ha Long vs. Hai An Transport |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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