Correlation Between Binhthuan Agriculture and FPT Digital
Can any of the company-specific risk be diversified away by investing in both Binhthuan Agriculture and FPT Digital 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 Binhthuan Agriculture and FPT Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binhthuan Agriculture Services and FPT Digital Retail, you can compare the effects of market volatilities on Binhthuan Agriculture and FPT Digital 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 Binhthuan Agriculture with a short position of FPT Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binhthuan Agriculture and FPT Digital.
Diversification Opportunities for Binhthuan Agriculture and FPT Digital
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Binhthuan and FPT is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Binhthuan Agriculture Services and FPT Digital Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FPT Digital Retail and Binhthuan Agriculture 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 Binhthuan Agriculture Services are associated (or correlated) with FPT Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FPT Digital Retail has no effect on the direction of Binhthuan Agriculture i.e., Binhthuan Agriculture and FPT Digital go up and down completely randomly.
Pair Corralation between Binhthuan Agriculture and FPT Digital
Assuming the 90 days trading horizon Binhthuan Agriculture Services is expected to under-perform the FPT Digital. In addition to that, Binhthuan Agriculture is 1.78 times more volatile than FPT Digital Retail. It trades about -0.24 of its total potential returns per unit of risk. FPT Digital Retail is currently generating about 0.39 per unit of volatility. If you would invest 18,380,000 in FPT Digital Retail on October 28, 2024 and sell it today you would earn a total of 2,220,000 from holding FPT Digital Retail or generate 12.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Binhthuan Agriculture Services vs. FPT Digital Retail
Performance |
| Timeline |
| Binhthuan Agriculture |
| FPT Digital Retail |
Binhthuan Agriculture and FPT Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binhthuan Agriculture and FPT Digital
The main advantage of trading using opposite Binhthuan Agriculture and FPT Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binhthuan Agriculture position performs unexpectedly, FPT Digital 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 FPT Digital will offset losses from the drop in FPT Digital's long position.| Binhthuan Agriculture vs. Phuoc Hoa Rubber | Binhthuan Agriculture vs. CEO Group JSC | Binhthuan Agriculture vs. Binh Duong Trade | Binhthuan Agriculture vs. PetroVietnam Transportation Corp |
| FPT Digital vs. TDT Investment and | FPT Digital vs. AgriBank Securities JSC | FPT Digital vs. Petrolimex International Trading | FPT Digital vs. Military Insurance Corp |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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