Correlation Between VN Index and Fecon Mining
Can any of the company-specific risk be diversified away by investing in both VN Index 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 VN Index and Fecon Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VN Index and Fecon Mining JSC, you can compare the effects of market volatilities on VN Index 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 VN Index with a short position of Fecon Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of VN Index and Fecon Mining.
Diversification Opportunities for VN Index and Fecon Mining
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VNI and Fecon is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding VN Index 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 VN Index 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 VN Index 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 VN Index i.e., VN Index and Fecon Mining go up and down completely randomly.
Pair Corralation between VN Index and Fecon Mining
Assuming the 90 days trading horizon VN Index is expected to generate 0.45 times more return on investment than Fecon Mining. However, VN Index is 2.22 times less risky than Fecon Mining. It trades about 0.04 of its potential returns per unit of risk. Fecon Mining JSC is currently generating about -0.18 per unit of risk. If you would invest 124,471 in VN Index on September 4, 2024 and sell it today you would earn a total of 611.00 from holding VN Index or generate 0.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VN Index vs. Fecon Mining JSC
Performance |
| Timeline |
VN Index and Fecon Mining Volatility Contrast
Predicted Return Density |
| Returns |
VN Index
Pair trading matchups for VN Index
Fecon Mining JSC
Pair trading matchups for Fecon Mining
Pair Trading with VN Index and Fecon Mining
The main advantage of trading using opposite VN Index and Fecon Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VN Index 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.| VN Index vs. Fecon Mining JSC | VN Index vs. Elcom Technology Communications | VN Index vs. Pacific Petroleum Transportation | VN Index vs. Transport and Industry |
| 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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