Correlation Between Binh Duong and Fecon Mining
Can any of the company-specific risk be diversified away by investing in both Binh Duong 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 Binh Duong and Fecon Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binh Duong Trade and Fecon Mining JSC, you can compare the effects of market volatilities on Binh Duong 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 Binh Duong with a short position of Fecon Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binh Duong and Fecon Mining.
Diversification Opportunities for Binh Duong and Fecon Mining
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Binh and Fecon is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Binh Duong Trade 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 Binh Duong 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 Binh Duong Trade 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 Binh Duong i.e., Binh Duong and Fecon Mining go up and down completely randomly.
Pair Corralation between Binh Duong and Fecon Mining
Assuming the 90 days trading horizon Binh Duong Trade is expected to generate 1.23 times more return on investment than Fecon Mining. However, Binh Duong is 1.23 times more volatile than Fecon Mining JSC. It trades about 0.02 of its potential returns per unit of risk. Fecon Mining JSC is currently generating about 0.0 per unit of risk. If you would invest 1,090,000 in Binh Duong Trade on October 7, 2024 and sell it today you would earn a total of 50,000 from holding Binh Duong Trade or generate 4.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Binh Duong Trade vs. Fecon Mining JSC
Performance |
| Timeline |
| Binh Duong Trade |
| Fecon Mining JSC |
Binh Duong and Fecon Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binh Duong and Fecon Mining
The main advantage of trading using opposite Binh Duong and Fecon Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binh Duong 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.| Binh Duong vs. FIT INVEST JSC | Binh Duong vs. Damsan JSC | Binh Duong vs. An Phat Plastic | Binh Duong vs. APG Securities Joint |
| Fecon Mining vs. FIT INVEST JSC | Fecon Mining vs. Damsan JSC | Fecon Mining vs. An Phat Plastic | Fecon Mining vs. APG Securities Joint |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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