Correlation Between FIT INVEST and Riverway Management
Can any of the company-specific risk be diversified away by investing in both FIT INVEST and Riverway Management 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 Riverway Management 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 Riverway Management JSC, you can compare the effects of market volatilities on FIT INVEST and Riverway Management 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 Riverway Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIT INVEST and Riverway Management.
Diversification Opportunities for FIT INVEST and Riverway Management
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FIT and Riverway is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding FIT INVEST JSC and Riverway Management JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Riverway Management JSC 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 Riverway Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Riverway Management JSC has no effect on the direction of FIT INVEST i.e., FIT INVEST and Riverway Management go up and down completely randomly.
Pair Corralation between FIT INVEST and Riverway Management
Assuming the 90 days trading horizon FIT INVEST is expected to generate 2.16 times less return on investment than Riverway Management. But when comparing it to its historical volatility, FIT INVEST JSC is 1.56 times less risky than Riverway Management. It trades about 0.01 of its potential returns per unit of risk. Riverway Management JSC is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 530,000 in Riverway Management JSC on November 4, 2024 and sell it today you would lose (10,000) from holding Riverway Management JSC or give up 1.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 91.08% |
| Values | Daily Returns |
FIT INVEST JSC vs. Riverway Management JSC
Performance |
| Timeline |
| FIT INVEST JSC |
| Riverway Management JSC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
FIT INVEST and Riverway Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIT INVEST and Riverway Management
The main advantage of trading using opposite FIT INVEST and Riverway Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIT INVEST position performs unexpectedly, Riverway Management 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 Riverway Management will offset losses from the drop in Riverway Management'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 |
| Riverway Management vs. FIT INVEST JSC | Riverway Management vs. Damsan JSC | Riverway Management vs. An Phat Plastic | Riverway Management 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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