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
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Binh and Fecon is 0.86. 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 is expected to generate 1.67 times less return on investment than Fecon Mining. But when comparing it to its historical volatility, Binh Duong Trade is 1.5 times less risky than Fecon Mining. It trades about 0.03 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 28, 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 | Strong |
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. Vietnam Airlines JSC | Binh Duong vs. Sao Ta Foods | Binh Duong vs. Plastic Additives JSC | Binh Duong vs. Tienlen Steel Corp |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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