Correlation Between Fecon Mining and Vietnam Petroleum
Can any of the company-specific risk be diversified away by investing in both Fecon Mining and Vietnam Petroleum 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 Petroleum 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 Petroleum Transport, you can compare the effects of market volatilities on Fecon Mining and Vietnam Petroleum 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 Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fecon Mining and Vietnam Petroleum.
Diversification Opportunities for Fecon Mining and Vietnam Petroleum
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fecon and Vietnam is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Fecon Mining JSC and Vietnam Petroleum Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Petroleum 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 Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Petroleum has no effect on the direction of Fecon Mining i.e., Fecon Mining and Vietnam Petroleum go up and down completely randomly.
Pair Corralation between Fecon Mining and Vietnam Petroleum
Assuming the 90 days trading horizon Fecon Mining JSC is expected to under-perform the Vietnam Petroleum. But the stock apears to be less risky and, when comparing its historical volatility, Fecon Mining JSC is 1.65 times less risky than Vietnam Petroleum. The stock trades about -0.23 of its potential returns per unit of risk. The Vietnam Petroleum Transport is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,280,000 in Vietnam Petroleum Transport on September 2, 2024 and sell it today you would earn a total of 140,000 from holding Vietnam Petroleum Transport or generate 10.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fecon Mining JSC vs. Vietnam Petroleum Transport
Performance |
| Timeline |
| Fecon Mining JSC |
| Vietnam Petroleum |
Fecon Mining and Vietnam Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fecon Mining and Vietnam Petroleum
The main advantage of trading using opposite Fecon Mining and Vietnam Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fecon Mining position performs unexpectedly, Vietnam Petroleum 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 Petroleum will offset losses from the drop in Vietnam Petroleum'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 |
| Vietnam Petroleum vs. Everland Investment JSC | Vietnam Petroleum vs. Tin Nghia Industrial | Vietnam Petroleum vs. PV2 Investment JSC | Vietnam Petroleum vs. Vien Dong 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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