Correlation Between Pha Lai and Fecon Mining
Can any of the company-specific risk be diversified away by investing in both Pha Lai 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 Pha Lai and Fecon Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pha Lai Thermal and Fecon Mining JSC, you can compare the effects of market volatilities on Pha Lai 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 Pha Lai with a short position of Fecon Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pha Lai and Fecon Mining.
Diversification Opportunities for Pha Lai and Fecon Mining
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pha and Fecon is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Pha Lai Thermal 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 Pha Lai 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 Pha Lai Thermal 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 Pha Lai i.e., Pha Lai and Fecon Mining go up and down completely randomly.
Pair Corralation between Pha Lai and Fecon Mining
Assuming the 90 days trading horizon Pha Lai Thermal is expected to generate 1.16 times more return on investment than Fecon Mining. However, Pha Lai is 1.16 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 -0.12 per unit of risk. If you would invest 1,197,142 in Pha Lai Thermal on September 4, 2024 and sell it today you would lose (87,142) from holding Pha Lai Thermal or give up 7.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Pha Lai Thermal vs. Fecon Mining JSC
Performance |
| Timeline |
| Pha Lai Thermal |
| Fecon Mining JSC |
Pha Lai and Fecon Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pha Lai and Fecon Mining
The main advantage of trading using opposite Pha Lai and Fecon Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pha Lai 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.| Pha Lai vs. Elcom Technology Communications | Pha Lai vs. Dong Nai Plastic | Pha Lai vs. Phuoc Hoa Rubber | Pha Lai vs. Telecoms Informatics JSC |
| Fecon Mining vs. FIT INVEST JSC | Fecon Mining vs. Damsan JSC | Fecon Mining vs. An Phat Plastic | Fecon Mining vs. Alphanam ME |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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