Correlation Between FIT INVEST and Phat Dat
Can any of the company-specific risk be diversified away by investing in both FIT INVEST and Phat Dat 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 Phat Dat 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 Phat Dat Real, you can compare the effects of market volatilities on FIT INVEST and Phat Dat 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 Phat Dat. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIT INVEST and Phat Dat.
Diversification Opportunities for FIT INVEST and Phat Dat
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FIT and Phat is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding FIT INVEST JSC and Phat Dat Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phat Dat Real 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 Phat Dat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phat Dat Real has no effect on the direction of FIT INVEST i.e., FIT INVEST and Phat Dat go up and down completely randomly.
Pair Corralation between FIT INVEST and Phat Dat
Assuming the 90 days trading horizon FIT INVEST is expected to generate 4.54 times less return on investment than Phat Dat. But when comparing it to its historical volatility, FIT INVEST JSC is 1.2 times less risky than Phat Dat. It trades about 0.01 of its potential returns per unit of risk. Phat Dat Real is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,400,351 in Phat Dat Real on September 2, 2024 and sell it today you would earn a total of 719,649 from holding Phat Dat Real or generate 51.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FIT INVEST JSC vs. Phat Dat Real
Performance |
| Timeline |
| FIT INVEST JSC |
| Phat Dat Real |
FIT INVEST and Phat Dat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIT INVEST and Phat Dat
The main advantage of trading using opposite FIT INVEST and Phat Dat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIT INVEST position performs unexpectedly, Phat Dat 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 Phat Dat will offset losses from the drop in Phat Dat's long position.| FIT INVEST vs. Damsan JSC | FIT INVEST vs. An Phat Plastic | FIT INVEST vs. Alphanam ME | FIT INVEST vs. Binhthuan Agriculture Services |
| Phat Dat vs. FIT INVEST JSC | Phat Dat vs. Damsan JSC | Phat Dat vs. An Phat Plastic | Phat Dat vs. Alphanam ME |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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