Correlation Between FIT INVEST and Tienlen Steel
Can any of the company-specific risk be diversified away by investing in both FIT INVEST and Tienlen Steel 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 Tienlen Steel 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 Tienlen Steel Corp, you can compare the effects of market volatilities on FIT INVEST and Tienlen Steel 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 Tienlen Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIT INVEST and Tienlen Steel.
Diversification Opportunities for FIT INVEST and Tienlen Steel
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FIT and Tienlen is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding FIT INVEST JSC and Tienlen Steel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tienlen Steel Corp 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 Tienlen Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tienlen Steel Corp has no effect on the direction of FIT INVEST i.e., FIT INVEST and Tienlen Steel go up and down completely randomly.
Pair Corralation between FIT INVEST and Tienlen Steel
Assuming the 90 days trading horizon FIT INVEST JSC is expected to generate 0.74 times more return on investment than Tienlen Steel. However, FIT INVEST JSC is 1.35 times less risky than Tienlen Steel. It trades about -0.2 of its potential returns per unit of risk. Tienlen Steel Corp is currently generating about -0.45 per unit of risk. If you would invest 440,000 in FIT INVEST JSC on August 31, 2024 and sell it today you would lose (22,000) from holding FIT INVEST JSC or give up 5.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FIT INVEST JSC vs. Tienlen Steel Corp
Performance |
| Timeline |
| FIT INVEST JSC |
| Tienlen Steel Corp |
FIT INVEST and Tienlen Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIT INVEST and Tienlen Steel
The main advantage of trading using opposite FIT INVEST and Tienlen Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIT INVEST position performs unexpectedly, Tienlen Steel 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 Tienlen Steel will offset losses from the drop in Tienlen Steel's long position.| FIT INVEST vs. Plastic Additives JSC | FIT INVEST vs. Picomat Plastic JSC | FIT INVEST vs. Hanoi Beer Alcohol | FIT INVEST vs. Military Insurance Corp |
| Tienlen Steel vs. FIT INVEST JSC | Tienlen Steel vs. Damsan JSC | Tienlen Steel vs. An Phat Plastic | Tienlen Steel 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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