Correlation Between FIT INVEST and HVC Investment
Can any of the company-specific risk be diversified away by investing in both FIT INVEST and HVC Investment 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 HVC Investment 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 HVC Investment and, you can compare the effects of market volatilities on FIT INVEST and HVC Investment 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 HVC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIT INVEST and HVC Investment.
Diversification Opportunities for FIT INVEST and HVC Investment
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between FIT and HVC is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding FIT INVEST JSC and HVC Investment and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HVC Investment 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 HVC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HVC Investment has no effect on the direction of FIT INVEST i.e., FIT INVEST and HVC Investment go up and down completely randomly.
Pair Corralation between FIT INVEST and HVC Investment
Assuming the 90 days trading horizon FIT INVEST JSC is expected to under-perform the HVC Investment. But the stock apears to be less risky and, when comparing its historical volatility, FIT INVEST JSC is 4.11 times less risky than HVC Investment. The stock trades about -0.18 of its potential returns per unit of risk. The HVC Investment and is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 914,000 in HVC Investment and on November 7, 2024 and sell it today you would earn a total of 53,000 from holding HVC Investment and or generate 5.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FIT INVEST JSC vs. HVC Investment and
Performance |
| Timeline |
| FIT INVEST JSC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| HVC Investment |
FIT INVEST and HVC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIT INVEST and HVC Investment
The main advantage of trading using opposite FIT INVEST and HVC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIT INVEST position performs unexpectedly, HVC Investment 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 HVC Investment will offset losses from the drop in HVC Investment's long position.| FIT INVEST vs. Hai An Transport | FIT INVEST vs. Elcom Technology Communications | FIT INVEST vs. Innovative Technology Development | FIT INVEST vs. Transport and Industry |
| HVC Investment vs. Transport and Industry | HVC Investment vs. Innovative Technology Development | HVC Investment 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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