Correlation Between Damsan JSC and FPT Digital
Can any of the company-specific risk be diversified away by investing in both Damsan JSC 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 Damsan JSC and FPT Digital 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 Digital Retail, you can compare the effects of market volatilities on Damsan JSC 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 Damsan JSC with a short position of FPT Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Damsan JSC and FPT Digital.
Diversification Opportunities for Damsan JSC and FPT Digital
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Damsan and FPT is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Damsan JSC 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 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 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 Damsan JSC i.e., Damsan JSC and FPT Digital go up and down completely randomly.
Pair Corralation between Damsan JSC and FPT Digital
Assuming the 90 days trading horizon Damsan JSC is expected to generate 3.73 times less return on investment than FPT Digital. In addition to that, Damsan JSC is 1.27 times more volatile than FPT Digital Retail. It trades about 0.03 of its total potential returns per unit of risk. FPT Digital Retail is currently generating about 0.13 per unit of volatility. If you would invest 5,730,613 in FPT Digital Retail on August 31, 2024 and sell it today you would earn a total of 12,119,387 from holding FPT Digital Retail or generate 211.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Damsan JSC vs. FPT Digital Retail
Performance |
| Timeline |
| Damsan JSC |
| FPT Digital Retail |
Damsan JSC and FPT Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Damsan JSC and FPT Digital
The main advantage of trading using opposite Damsan JSC and FPT Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Damsan JSC 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.| Damsan JSC vs. Tien Giang Investment | Damsan JSC vs. Vu Dang Investment | Damsan JSC vs. Bao Ngoc Investment | Damsan JSC vs. Vina2 Investment and |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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