Correlation Between FIT INVEST and Saigon Machinery
Can any of the company-specific risk be diversified away by investing in both FIT INVEST and Saigon Machinery 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 Saigon Machinery 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 Saigon Machinery Spare, you can compare the effects of market volatilities on FIT INVEST and Saigon Machinery 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 Saigon Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIT INVEST and Saigon Machinery.
Diversification Opportunities for FIT INVEST and Saigon Machinery
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FIT and Saigon is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding FIT INVEST JSC and Saigon Machinery Spare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saigon Machinery Spare 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 Saigon Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saigon Machinery Spare has no effect on the direction of FIT INVEST i.e., FIT INVEST and Saigon Machinery go up and down completely randomly.
Pair Corralation between FIT INVEST and Saigon Machinery
Assuming the 90 days trading horizon FIT INVEST JSC is expected to under-perform the Saigon Machinery. But the stock apears to be less risky and, when comparing its historical volatility, FIT INVEST JSC is 4.66 times less risky than Saigon Machinery. The stock trades about -0.31 of its potential returns per unit of risk. The Saigon Machinery Spare is currently generating about 1.03 of returns per unit of risk over similar time horizon. If you would invest 1,090,000 in Saigon Machinery Spare on October 16, 2024 and sell it today you would earn a total of 510,000 from holding Saigon Machinery Spare or generate 46.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 57.14% |
| Values | Daily Returns |
FIT INVEST JSC vs. Saigon Machinery Spare
Performance |
| Timeline |
| FIT INVEST JSC |
| Saigon Machinery Spare |
FIT INVEST and Saigon Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIT INVEST and Saigon Machinery
The main advantage of trading using opposite FIT INVEST and Saigon Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIT INVEST position performs unexpectedly, Saigon Machinery 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 Saigon Machinery will offset losses from the drop in Saigon Machinery's long position.| FIT INVEST vs. PVI Reinsurance Corp | FIT INVEST vs. Pha Le Plastics | FIT INVEST vs. Military Insurance Corp | FIT INVEST vs. Asia Commercial Bank |
| Saigon Machinery vs. FIT INVEST JSC | Saigon Machinery vs. Damsan JSC | Saigon Machinery vs. An Phat Plastic | Saigon Machinery vs. APG Securities Joint |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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