Correlation Between FIT INVEST and Song Hong
Can any of the company-specific risk be diversified away by investing in both FIT INVEST and Song Hong 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 Song Hong 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 Song Hong Garment, you can compare the effects of market volatilities on FIT INVEST and Song Hong 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 Song Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIT INVEST and Song Hong.
Diversification Opportunities for FIT INVEST and Song Hong
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FIT and Song is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding FIT INVEST JSC and Song Hong Garment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Song Hong Garment 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 Song Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Song Hong Garment has no effect on the direction of FIT INVEST i.e., FIT INVEST and Song Hong go up and down completely randomly.
Pair Corralation between FIT INVEST and Song Hong
Assuming the 90 days trading horizon FIT INVEST JSC is expected to under-perform the Song Hong. But the stock apears to be less risky and, when comparing its historical volatility, FIT INVEST JSC is 1.39 times less risky than Song Hong. The stock trades about -0.03 of its potential returns per unit of risk. The Song Hong Garment is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4,485,882 in Song Hong Garment on November 2, 2024 and sell it today you would earn a total of 714,118 from holding Song Hong Garment or generate 15.92% 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. Song Hong Garment
Performance |
| Timeline |
| FIT INVEST JSC |
| Song Hong Garment |
FIT INVEST and Song Hong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIT INVEST and Song Hong
The main advantage of trading using opposite FIT INVEST and Song Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIT INVEST position performs unexpectedly, Song Hong 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 Song Hong will offset losses from the drop in Song Hong's long position.| FIT INVEST vs. Damsan JSC | FIT INVEST vs. An Phat Plastic | FIT INVEST vs. APG Securities Joint | FIT INVEST vs. Binhthuan Agriculture Services |
| Song Hong vs. FPT Digital Retail | Song Hong vs. Innovative Technology Development | Song Hong vs. Transport and Industry | Song Hong vs. Saigon Beer Alcohol |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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