Correlation Between FIT INVEST and Southern Rubber
Can any of the company-specific risk be diversified away by investing in both FIT INVEST and Southern Rubber 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 FIT INVEST and Southern Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIT INVEST JSC and Southern Rubber Industry, you can compare the effects of market volatilities on FIT INVEST and Southern Rubber 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 FIT INVEST with a short position of Southern Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIT INVEST and Southern Rubber.
Diversification Opportunities for FIT INVEST and Southern Rubber
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between FIT and Southern is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding FIT INVEST JSC and Southern Rubber Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Rubber Industry and FIT INVEST 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 FIT INVEST JSC are associated (or correlated) with Southern Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Rubber Industry has no effect on the direction of FIT INVEST i.e., FIT INVEST and Southern Rubber go up and down completely randomly.
Pair Corralation between FIT INVEST and Southern Rubber
Assuming the 90 days trading horizon FIT INVEST JSC is expected to generate 1.17 times more return on investment than Southern Rubber. However, FIT INVEST is 1.17 times more volatile than Southern Rubber Industry. It trades about 0.0 of its potential returns per unit of risk. Southern Rubber Industry is currently generating about -0.01 per unit of risk. If you would invest 450,000 in FIT INVEST JSC on August 24, 2024 and sell it today you would lose (35,000) from holding FIT INVEST JSC or give up 7.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.58% |
| Values | Daily Returns |
FIT INVEST JSC vs. Southern Rubber Industry
Performance |
| Timeline |
| FIT INVEST JSC |
| Southern Rubber Industry |
FIT INVEST and Southern Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIT INVEST and Southern Rubber
The main advantage of trading using opposite FIT INVEST and Southern Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIT INVEST position performs unexpectedly, Southern Rubber 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 Southern Rubber will offset losses from the drop in Southern Rubber's long position.| FIT INVEST vs. Damsan JSC | FIT INVEST vs. An Phat Plastic | FIT INVEST vs. APG Securities Joint | FIT INVEST vs. Binhthuan Agriculture Services |
| Southern Rubber vs. FIT INVEST JSC | Southern Rubber vs. Damsan JSC | Southern Rubber vs. An Phat Plastic | Southern Rubber vs. APG Securities Joint |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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