Correlation Between Fecon Mining and Telecoms Informatics
Can any of the company-specific risk be diversified away by investing in both Fecon Mining and Telecoms Informatics 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 Telecoms Informatics 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 Telecoms Informatics JSC, you can compare the effects of market volatilities on Fecon Mining and Telecoms Informatics 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 Telecoms Informatics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fecon Mining and Telecoms Informatics.
Diversification Opportunities for Fecon Mining and Telecoms Informatics
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fecon and Telecoms is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Fecon Mining JSC and Telecoms Informatics JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telecoms Informatics JSC 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 Telecoms Informatics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telecoms Informatics JSC has no effect on the direction of Fecon Mining i.e., Fecon Mining and Telecoms Informatics go up and down completely randomly.
Pair Corralation between Fecon Mining and Telecoms Informatics
Assuming the 90 days trading horizon Fecon Mining is expected to generate 14.78 times less return on investment than Telecoms Informatics. But when comparing it to its historical volatility, Fecon Mining JSC is 1.1 times less risky than Telecoms Informatics. It trades about 0.01 of its potential returns per unit of risk. Telecoms Informatics JSC is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,195,000 in Telecoms Informatics JSC on October 18, 2024 and sell it today you would earn a total of 155,000 from holding Telecoms Informatics JSC or generate 12.97% 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. Telecoms Informatics JSC
Performance |
| Timeline |
| Fecon Mining JSC |
| Telecoms Informatics JSC |
Fecon Mining and Telecoms Informatics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fecon Mining and Telecoms Informatics
The main advantage of trading using opposite Fecon Mining and Telecoms Informatics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fecon Mining position performs unexpectedly, Telecoms Informatics 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 Telecoms Informatics will offset losses from the drop in Telecoms Informatics' long position.| Fecon Mining vs. IDJ FINANCIAL | Fecon Mining vs. South Basic Chemicals | Fecon Mining vs. VietinBank Securities JSC | Fecon Mining vs. Nafoods Group JSC |
| Telecoms Informatics vs. PetroVietnam Drilling Well | Telecoms Informatics vs. Fecon Mining JSC | Telecoms Informatics vs. Elcom Technology Communications | Telecoms Informatics vs. Tin Nghia Industrial |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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