Correlation Between Fecon Mining and Truong Thanh
Can any of the company-specific risk be diversified away by investing in both Fecon Mining and Truong Thanh 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 Truong Thanh 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 Truong Thanh Furniture, you can compare the effects of market volatilities on Fecon Mining and Truong Thanh 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 Truong Thanh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fecon Mining and Truong Thanh.
Diversification Opportunities for Fecon Mining and Truong Thanh
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fecon and Truong is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Fecon Mining JSC and Truong Thanh Furniture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Truong Thanh Furniture 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 Truong Thanh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Truong Thanh Furniture has no effect on the direction of Fecon Mining i.e., Fecon Mining and Truong Thanh go up and down completely randomly.
Pair Corralation between Fecon Mining and Truong Thanh
Assuming the 90 days trading horizon Fecon Mining JSC is expected to generate 1.58 times more return on investment than Truong Thanh. However, Fecon Mining is 1.58 times more volatile than Truong Thanh Furniture. It trades about 0.01 of its potential returns per unit of risk. Truong Thanh Furniture is currently generating about -0.05 per unit of risk. If you would invest 328,000 in Fecon Mining JSC on November 7, 2024 and sell it today you would lose (1,000.00) from holding Fecon Mining JSC or give up 0.3% 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. Truong Thanh Furniture
Performance |
| Timeline |
| Fecon Mining JSC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Truong Thanh Furniture |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fecon Mining and Truong Thanh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fecon Mining and Truong Thanh
The main advantage of trading using opposite Fecon Mining and Truong Thanh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fecon Mining position performs unexpectedly, Truong Thanh 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 Truong Thanh will offset losses from the drop in Truong Thanh's long position.The idea behind Fecon Mining JSC and Truong Thanh Furniture pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |