Correlation Between Hanoi Plastics and Fecon Mining
Can any of the company-specific risk be diversified away by investing in both Hanoi Plastics 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 Hanoi Plastics and Fecon Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanoi Plastics JSC and Fecon Mining JSC, you can compare the effects of market volatilities on Hanoi Plastics 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 Hanoi Plastics with a short position of Fecon Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanoi Plastics and Fecon Mining.
Diversification Opportunities for Hanoi Plastics and Fecon Mining
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hanoi and Fecon is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Hanoi Plastics JSC 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 Hanoi Plastics 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 Hanoi Plastics JSC 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 Hanoi Plastics i.e., Hanoi Plastics and Fecon Mining go up and down completely randomly.
Pair Corralation between Hanoi Plastics and Fecon Mining
Assuming the 90 days trading horizon Hanoi Plastics JSC is expected to generate 1.05 times more return on investment than Fecon Mining. However, Hanoi Plastics is 1.05 times more volatile than Fecon Mining JSC. It trades about 0.01 of its potential returns per unit of risk. Fecon Mining JSC is currently generating about -0.02 per unit of risk. If you would invest 1,339,765 in Hanoi Plastics JSC on November 5, 2024 and sell it today you would lose (34,765) from holding Hanoi Plastics JSC or give up 2.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanoi Plastics JSC vs. Fecon Mining JSC
Performance |
| Timeline |
| Hanoi Plastics JSC |
| Fecon Mining JSC |
Hanoi Plastics and Fecon Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanoi Plastics and Fecon Mining
The main advantage of trading using opposite Hanoi Plastics and Fecon Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanoi Plastics 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.| Hanoi Plastics vs. Binh Duong Trade | Hanoi Plastics vs. Dinhvu Port Investment | Hanoi Plastics vs. Petrolimex International Trading | Hanoi Plastics vs. Vincom Retail JSC |
| Fecon Mining vs. Transport and Industry | Fecon Mining vs. SCG Construction JSC | Fecon Mining vs. BaoMinh Insurance Corp | Fecon Mining vs. Nafoods Group JSC |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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