Correlation Between FIT INVEST and South Basic
Can any of the company-specific risk be diversified away by investing in both FIT INVEST and South Basic 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 South Basic 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 South Basic Chemicals, you can compare the effects of market volatilities on FIT INVEST and South Basic 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 South Basic. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIT INVEST and South Basic.
Diversification Opportunities for FIT INVEST and South Basic
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FIT and South is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding FIT INVEST JSC and South Basic Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on South Basic Chemicals 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 South Basic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of South Basic Chemicals has no effect on the direction of FIT INVEST i.e., FIT INVEST and South Basic go up and down completely randomly.
Pair Corralation between FIT INVEST and South Basic
Assuming the 90 days trading horizon FIT INVEST JSC is expected to generate 0.42 times more return on investment than South Basic. However, FIT INVEST JSC is 2.4 times less risky than South Basic. It trades about -0.25 of its potential returns per unit of risk. South Basic Chemicals is currently generating about -0.28 per unit of risk. If you would invest 418,000 in FIT INVEST JSC on November 4, 2024 and sell it today you would lose (13,000) from holding FIT INVEST JSC or give up 3.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FIT INVEST JSC vs. South Basic Chemicals
Performance |
| Timeline |
| FIT INVEST JSC |
| South Basic Chemicals |
FIT INVEST and South Basic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIT INVEST and South Basic
The main advantage of trading using opposite FIT INVEST and South Basic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIT INVEST position performs unexpectedly, South Basic 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 South Basic will offset losses from the drop in South Basic's long position.| FIT INVEST vs. Danang Education Investment | FIT INVEST vs. Mobile World Investment | FIT INVEST vs. Thanh Dat Investment | FIT INVEST vs. Vien Dong Investment |
| South Basic vs. Everland Investment JSC | South Basic vs. Hoang Huy Investment | South Basic vs. Construction And Investment | South Basic vs. Binhthuan Agriculture Services |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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