Correlation Between FIT INVEST and Ducgiang Chemicals
Can any of the company-specific risk be diversified away by investing in both FIT INVEST and Ducgiang Chemicals 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 Ducgiang Chemicals 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 Ducgiang Chemicals Detergent, you can compare the effects of market volatilities on FIT INVEST and Ducgiang Chemicals 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 Ducgiang Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIT INVEST and Ducgiang Chemicals.
Diversification Opportunities for FIT INVEST and Ducgiang Chemicals
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FIT and Ducgiang is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding FIT INVEST JSC and Ducgiang Chemicals Detergent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ducgiang 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 Ducgiang Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ducgiang Chemicals has no effect on the direction of FIT INVEST i.e., FIT INVEST and Ducgiang Chemicals go up and down completely randomly.
Pair Corralation between FIT INVEST and Ducgiang Chemicals
Assuming the 90 days trading horizon FIT INVEST JSC is expected to under-perform the Ducgiang Chemicals. But the stock apears to be less risky and, when comparing its historical volatility, FIT INVEST JSC is 1.39 times less risky than Ducgiang Chemicals. The stock trades about -0.12 of its potential returns per unit of risk. The Ducgiang Chemicals Detergent is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 11,243,400 in Ducgiang Chemicals Detergent on August 29, 2024 and sell it today you would earn a total of 106,600 from holding Ducgiang Chemicals Detergent or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FIT INVEST JSC vs. Ducgiang Chemicals Detergent
Performance |
| Timeline |
| FIT INVEST JSC |
| Ducgiang Chemicals |
FIT INVEST and Ducgiang Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIT INVEST and Ducgiang Chemicals
The main advantage of trading using opposite FIT INVEST and Ducgiang Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIT INVEST position performs unexpectedly, Ducgiang Chemicals 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 Ducgiang Chemicals will offset losses from the drop in Ducgiang Chemicals' long position.| FIT INVEST vs. Damsan JSC | FIT INVEST vs. An Phat Plastic | FIT INVEST vs. Alphanam ME | FIT INVEST vs. APG Securities Joint |
| Ducgiang Chemicals vs. FIT INVEST JSC | Ducgiang Chemicals vs. Damsan JSC | Ducgiang Chemicals vs. An Phat Plastic | Ducgiang Chemicals vs. Alphanam ME |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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