Correlation Between Everland Investment and Fecon Mining

Can any of the company-specific risk be diversified away by investing in both Everland Investment 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 Everland Investment and Fecon Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Everland Investment JSC and Fecon Mining JSC, you can compare the effects of market volatilities on Everland Investment 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 Everland Investment with a short position of Fecon Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Everland Investment and Fecon Mining.

Diversification Opportunities for Everland Investment and Fecon Mining

0.65

Correlation Coefficient

Everland Investment  Fecon Mining

Poor diversification

The 3 months correlation between Everland and Fecon is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Everland Investment 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 Everland Investment 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 Everland Investment 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 Everland Investment i.e., Everland Investment and Fecon Mining go up and down completely randomly.

Pair Corralation between Everland Investment and Fecon Mining

Assuming the 90 days trading horizon Everland Investment is expected to generate 21.62 times less return on investment than Fecon Mining. But when comparing it to its historical volatility, Everland Investment JSC is 2.19 times less risky than Fecon Mining. It trades about 0.0 of its potential returns per unit of risk. Fecon Mining JSC is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  362,000  in Fecon Mining JSC on December 30, 2024 and sell it today you would earn a total of  12,000  from holding Fecon Mining JSC or generate 3.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Everland Investment JSC  vs.  Fecon Mining JSC

Everland Investment JSC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Everland Investment JSC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Everland Investment is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Fecon Mining JSC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fecon Mining JSC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, Fecon Mining may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Everland Investment and Fecon Mining

The main advantage of trading using opposite Everland Investment and Fecon Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everland Investment 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.

The idea behind Everland Investment JSC and Fecon Mining JSC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.