Correlation Between Century Synthetic and Fecon Mining
Can any of the company-specific risk be diversified away by investing in both Century Synthetic 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 Century Synthetic and Fecon Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Synthetic Fiber and Fecon Mining JSC, you can compare the effects of market volatilities on Century Synthetic 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 Century Synthetic with a short position of Fecon Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Synthetic and Fecon Mining.
Diversification Opportunities for Century Synthetic and Fecon Mining
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Century and Fecon is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Century Synthetic Fiber 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 Century Synthetic 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 Century Synthetic Fiber 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 Century Synthetic i.e., Century Synthetic and Fecon Mining go up and down completely randomly.
Pair Corralation between Century Synthetic and Fecon Mining
Assuming the 90 days trading horizon Century Synthetic Fiber is expected to generate 0.59 times more return on investment than Fecon Mining. However, Century Synthetic Fiber is 1.71 times less risky than Fecon Mining. It trades about -0.28 of its potential returns per unit of risk. Fecon Mining JSC is currently generating about -0.28 per unit of risk. If you would invest 2,565,000 in Century Synthetic Fiber on September 1, 2024 and sell it today you would lose (130,000) from holding Century Synthetic Fiber or give up 5.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Century Synthetic Fiber vs. Fecon Mining JSC
Performance |
| Timeline |
| Century Synthetic Fiber |
| Fecon Mining JSC |
Century Synthetic and Fecon Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Synthetic and Fecon Mining
The main advantage of trading using opposite Century Synthetic and Fecon Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Synthetic 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.| Century Synthetic vs. Hanoi Plastics JSC | Century Synthetic vs. Southern Rubber Industry | Century Synthetic vs. FPT Digital Retail | Century Synthetic vs. Materials Petroleum JSC |
| Fecon Mining vs. Vien Dong Investment | Fecon Mining vs. CMC Investment JSC | Fecon Mining vs. Dong A Hotel | Fecon Mining vs. Development Investment Construction |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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