Correlation Between Fecon Mining and Thanh Dat

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

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

Diversification Opportunities for Fecon Mining and Thanh Dat

-0.65

Correlation Coefficient

Fecon Mining  Thanh Dat

Excellent diversification

The 3 months correlation between Fecon and Thanh is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Fecon Mining JSC and Thanh Dat Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thanh Dat Investment and Fecon Mining 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 Fecon Mining JSC are associated (or correlated) with Thanh Dat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thanh Dat Investment has no effect on the direction of Fecon Mining i.e., Fecon Mining and Thanh Dat go up and down completely randomly.

Pair Corralation between Fecon Mining and Thanh Dat

Assuming the 90 days trading horizon Fecon Mining JSC is expected to generate 1.9 times more return on investment than Thanh Dat. However, Fecon Mining is 1.9 times more volatile than Thanh Dat Investment. It trades about 0.23 of its potential returns per unit of risk. Thanh Dat Investment is currently generating about -0.13 per unit of risk. If you would invest  308,000  in Fecon Mining JSC on November 28, 2024 and sell it today you would earn a total of  170,000  from holding Fecon Mining JSC or generate 55.19% return on investment over 90 days.

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

Fecon Mining JSC  vs.  Thanh Dat Investment

Fecon Mining JSC

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fecon Mining JSC are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, Fecon Mining displayed solid returns over the last few months and may actually be approaching a breakup point.

Thanh Dat Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thanh Dat Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Fecon Mining and Thanh Dat

The main advantage of trading using opposite Fecon Mining and Thanh Dat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fecon Mining position performs unexpectedly, Thanh Dat 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 Thanh Dat will offset losses from the drop in Thanh Dat's long position.

The idea behind Fecon Mining JSC and Thanh Dat Investment 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.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.