Correlation Between Fecon Mining and TDG Global
Can any of the company-specific risk be diversified away by investing in both Fecon Mining and TDG Global 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 TDG Global 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 TDG Global Investment, you can compare the effects of market volatilities on Fecon Mining and TDG Global 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 TDG Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fecon Mining and TDG Global.
Diversification Opportunities for Fecon Mining and TDG Global
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fecon and TDG is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Fecon Mining JSC and TDG Global Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TDG Global 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 TDG Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TDG Global Investment has no effect on the direction of Fecon Mining i.e., Fecon Mining and TDG Global go up and down completely randomly.
Pair Corralation between Fecon Mining and TDG Global
Assuming the 90 days trading horizon Fecon Mining JSC is expected to generate 1.46 times more return on investment than TDG Global. However, Fecon Mining is 1.46 times more volatile than TDG Global Investment. It trades about 0.51 of its potential returns per unit of risk. TDG Global Investment is currently generating about 0.34 per unit of risk. If you would invest 323,000 in Fecon Mining JSC on November 28, 2024 and sell it today you would earn a total of 162,000 from holding Fecon Mining JSC or generate 50.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Fecon Mining JSC vs. TDG Global Investment
Performance |
| Timeline |
| Fecon Mining JSC |
| TDG Global Investment |
Fecon Mining and TDG Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fecon Mining and TDG Global
The main advantage of trading using opposite Fecon Mining and TDG Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fecon Mining position performs unexpectedly, TDG Global 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 TDG Global will offset losses from the drop in TDG Global's long position.| Fecon Mining vs. Military Insurance Corp | Fecon Mining vs. Nafoods Group JSC | Fecon Mining vs. Sao Ta Foods | Fecon Mining vs. Petrovietnam Drilling Mud |
| TDG Global vs. Nam Kim Steel | TDG Global vs. Petrolimex Insurance Corp | TDG Global vs. Vincom Retail JSC | TDG Global 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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