Correlation Between Damsan JSC and FPT Corp
Can any of the company-specific risk be diversified away by investing in both Damsan JSC and FPT Corp 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 Damsan JSC and FPT Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Damsan JSC and FPT Corp, you can compare the effects of market volatilities on Damsan JSC and FPT Corp 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 Damsan JSC with a short position of FPT Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Damsan JSC and FPT Corp.
Diversification Opportunities for Damsan JSC and FPT Corp
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Damsan and FPT is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Damsan JSC and FPT Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FPT Corp and Damsan JSC 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 Damsan JSC are associated (or correlated) with FPT Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FPT Corp has no effect on the direction of Damsan JSC i.e., Damsan JSC and FPT Corp go up and down completely randomly.
Pair Corralation between Damsan JSC and FPT Corp
Assuming the 90 days trading horizon Damsan JSC is expected to under-perform the FPT Corp. In addition to that, Damsan JSC is 1.34 times more volatile than FPT Corp. It trades about -0.28 of its total potential returns per unit of risk. FPT Corp is currently generating about -0.09 per unit of volatility. If you would invest 14,800,000 in FPT Corp on October 18, 2024 and sell it today you would lose (250,000) from holding FPT Corp or give up 1.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Damsan JSC vs. FPT Corp
Performance |
| Timeline |
| Damsan JSC |
| FPT Corp |
Damsan JSC and FPT Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Damsan JSC and FPT Corp
The main advantage of trading using opposite Damsan JSC and FPT Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Damsan JSC position performs unexpectedly, FPT Corp 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 Corp will offset losses from the drop in FPT Corp's long position.| Damsan JSC vs. Viet Nam Construction | Damsan JSC vs. Visicons Construction and | Damsan JSC vs. Elcom Technology Communications | Damsan JSC vs. Fecon Mining JSC |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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