Correlation Between HVC Investment and Fecon Mining
Can any of the company-specific risk be diversified away by investing in both HVC Investment and Fecon Mining 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 HVC Investment and Fecon Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HVC Investment and and Fecon Mining JSC, you can compare the effects of market volatilities on HVC Investment and Fecon Mining 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 HVC Investment with a short position of Fecon Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of HVC Investment and Fecon Mining.
Diversification Opportunities for HVC Investment and Fecon Mining
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between HVC and Fecon is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding HVC Investment and and Fecon Mining JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fecon Mining JSC and HVC Investment 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 HVC Investment and are associated (or correlated) with Fecon Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fecon Mining JSC has no effect on the direction of HVC Investment i.e., HVC Investment and Fecon Mining go up and down completely randomly.
Pair Corralation between HVC Investment and Fecon Mining
Assuming the 90 days trading horizon HVC Investment and is expected to under-perform the Fecon Mining. But the stock apears to be less risky and, when comparing its historical volatility, HVC Investment and is 2.05 times less risky than Fecon Mining. The stock trades about -0.06 of its potential returns per unit of risk. The Fecon Mining JSC is currently generating about 0.5 of returns per unit of risk over similar time horizon. If you would invest 323,000 in Fecon Mining JSC on November 28, 2024 and sell it today you would earn a total of 155,000 from holding Fecon Mining JSC or generate 47.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HVC Investment and vs. Fecon Mining JSC
Performance |
| Timeline |
| HVC Investment |
| Fecon Mining JSC |
HVC Investment and Fecon Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HVC Investment and Fecon Mining
The main advantage of trading using opposite HVC Investment and Fecon Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HVC Investment position performs unexpectedly, Fecon Mining 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 Fecon Mining will offset losses from the drop in Fecon Mining's long position.| HVC Investment vs. TDT Investment and | HVC Investment vs. Ha Long Investment | HVC Investment vs. PV2 Investment JSC | HVC Investment vs. Hoang Huy Investment |
| Fecon Mining vs. TDT Investment and | Fecon Mining vs. PC3 Investment JSC | Fecon Mining vs. Construction And Investment | Fecon Mining vs. Long Giang 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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