Correlation Between FIT INVEST and MHC JSC
Can any of the company-specific risk be diversified away by investing in both FIT INVEST and MHC JSC 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 MHC JSC 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 MHC JSC, you can compare the effects of market volatilities on FIT INVEST and MHC JSC 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 MHC JSC. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIT INVEST and MHC JSC.
Diversification Opportunities for FIT INVEST and MHC JSC
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between FIT and MHC is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding FIT INVEST JSC and MHC JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MHC 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 MHC JSC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MHC JSC has no effect on the direction of FIT INVEST i.e., FIT INVEST and MHC JSC go up and down completely randomly.
Pair Corralation between FIT INVEST and MHC JSC
Assuming the 90 days trading horizon FIT INVEST JSC is expected to generate 0.69 times more return on investment than MHC JSC. However, FIT INVEST JSC is 1.46 times less risky than MHC JSC. It trades about -0.01 of its potential returns per unit of risk. MHC JSC is currently generating about -0.04 per unit of risk. If you would invest 435,000 in FIT INVEST JSC on August 27, 2024 and sell it today you would lose (20,000) from holding FIT INVEST JSC or give up 4.6% 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. MHC JSC
Performance |
| Timeline |
| FIT INVEST JSC |
| MHC JSC |
FIT INVEST and MHC JSC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIT INVEST and MHC JSC
The main advantage of trading using opposite FIT INVEST and MHC JSC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIT INVEST position performs unexpectedly, MHC JSC 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 MHC JSC will offset losses from the drop in MHC JSC's long position.| FIT INVEST vs. Hanoi Plastics JSC | FIT INVEST vs. Vietnam Rubber Group | FIT INVEST vs. PVI Reinsurance Corp | FIT INVEST vs. Pacific Petroleum Transportation |
| MHC JSC vs. Vietnam Petroleum Transport | MHC JSC vs. Transport and Industry | MHC JSC vs. PetroVietnam Transportation Corp | MHC JSC vs. Post and Telecommunications |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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