Correlation Between Fecon Mining and Mobile World

Can any of the company-specific risk be diversified away by investing in both Fecon Mining and Mobile World 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 Mobile World 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 Mobile World Investment, you can compare the effects of market volatilities on Fecon Mining and Mobile World 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 Mobile World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fecon Mining and Mobile World.

Diversification Opportunities for Fecon Mining and Mobile World

0.55

Correlation Coefficient

Fecon Mining  Mobile World

Very weak diversification

The 3 months correlation between Fecon and Mobile is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Fecon Mining JSC and Mobile World Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobile World 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 Mobile World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobile World Investment has no effect on the direction of Fecon Mining i.e., Fecon Mining and Mobile World go up and down completely randomly.

Pair Corralation between Fecon Mining and Mobile World

Assuming the 90 days trading horizon Fecon Mining JSC is expected to under-perform the Mobile World. But the stock apears to be less risky and, when comparing its historical volatility, Fecon Mining JSC is 1.02 times less risky than Mobile World. The stock trades about -0.02 of its potential returns per unit of risk. The Mobile World Investment is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  6,580,000  in Mobile World Investment on September 29, 2024 and sell it today you would lose (440,000) from holding Mobile World Investment or give up 6.69% of portfolio value over 90 days.

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

Fecon Mining JSC  vs.  Mobile World Investment

Fecon Mining JSC

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fecon Mining JSC are ranked lower than 9 (%) 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.

Mobile World Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mobile World Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Fecon Mining and Mobile World

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

The idea behind Fecon Mining JSC and Mobile World 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.

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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.