Correlation Between FIT INVEST and SMC Investment
Can any of the company-specific risk be diversified away by investing in both FIT INVEST and SMC 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 SMC 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 SMC Investment Trading, you can compare the effects of market volatilities on FIT INVEST and SMC 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 SMC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIT INVEST and SMC Investment.
Diversification Opportunities for FIT INVEST and SMC Investment
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between FIT and SMC is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding FIT INVEST JSC and SMC Investment Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMC Investment Trading 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 SMC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMC Investment Trading has no effect on the direction of FIT INVEST i.e., FIT INVEST and SMC Investment go up and down completely randomly.
Pair Corralation between FIT INVEST and SMC Investment
Assuming the 90 days trading horizon FIT INVEST JSC is expected to generate 0.3 times more return on investment than SMC Investment. However, FIT INVEST JSC is 3.36 times less risky than SMC Investment. It trades about -0.11 of its potential returns per unit of risk. SMC Investment Trading is currently generating about -0.05 per unit of risk. If you would invest 430,000 in FIT INVEST JSC on October 26, 2024 and sell it today you would lose (28,000) from holding FIT INVEST JSC or give up 6.51% 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. SMC Investment Trading
Performance |
| Timeline |
| FIT INVEST JSC |
| SMC Investment Trading |
FIT INVEST and SMC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIT INVEST and SMC Investment
The main advantage of trading using opposite FIT INVEST and SMC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIT INVEST position performs unexpectedly, SMC 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 SMC Investment will offset losses from the drop in SMC Investment's long position.| FIT INVEST vs. Binh Duong Trade | FIT INVEST vs. FPT Digital Retail | FIT INVEST vs. BIDV Insurance Corp | FIT INVEST vs. Vietnam Dairy Products |
| SMC Investment vs. FIT INVEST JSC | SMC Investment vs. Damsan JSC | SMC Investment vs. An Phat Plastic | SMC Investment 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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