Correlation Between FIT INVEST and Hochiminh City
Can any of the company-specific risk be diversified away by investing in both FIT INVEST and Hochiminh City 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 Hochiminh City 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 Hochiminh City Metal, you can compare the effects of market volatilities on FIT INVEST and Hochiminh City 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 Hochiminh City. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIT INVEST and Hochiminh City.
Diversification Opportunities for FIT INVEST and Hochiminh City
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FIT and Hochiminh is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding FIT INVEST JSC and Hochiminh City Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hochiminh City Metal 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 Hochiminh City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hochiminh City Metal has no effect on the direction of FIT INVEST i.e., FIT INVEST and Hochiminh City go up and down completely randomly.
Pair Corralation between FIT INVEST and Hochiminh City
Assuming the 90 days trading horizon FIT INVEST JSC is expected to generate 0.28 times more return on investment than Hochiminh City. However, FIT INVEST JSC is 3.53 times less risky than Hochiminh City. It trades about -0.25 of its potential returns per unit of risk. Hochiminh City Metal is currently generating about -0.21 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. Hochiminh City Metal
Performance |
| Timeline |
| FIT INVEST JSC |
| Hochiminh City Metal |
FIT INVEST and Hochiminh City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIT INVEST and Hochiminh City
The main advantage of trading using opposite FIT INVEST and Hochiminh City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIT INVEST position performs unexpectedly, Hochiminh City 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 Hochiminh City will offset losses from the drop in Hochiminh City'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 |
| Hochiminh City vs. Post and Telecommunications | Hochiminh City vs. Petrolimex Petrochemical JSC | Hochiminh City vs. South Basic Chemicals | Hochiminh City vs. IDJ FINANCIAL |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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