Correlation Between FIT INVEST and Vina2 Investment
Can any of the company-specific risk be diversified away by investing in both FIT INVEST and Vina2 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 Vina2 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 Vina2 Investment and, you can compare the effects of market volatilities on FIT INVEST and Vina2 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 Vina2 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIT INVEST and Vina2 Investment.
Diversification Opportunities for FIT INVEST and Vina2 Investment
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FIT and Vina2 is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding FIT INVEST JSC and Vina2 Investment and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vina2 Investment 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 Vina2 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vina2 Investment has no effect on the direction of FIT INVEST i.e., FIT INVEST and Vina2 Investment go up and down completely randomly.
Pair Corralation between FIT INVEST and Vina2 Investment
Assuming the 90 days trading horizon FIT INVEST JSC is expected to generate 0.41 times more return on investment than Vina2 Investment. However, FIT INVEST JSC is 2.41 times less risky than Vina2 Investment. It trades about -0.25 of its potential returns per unit of risk. Vina2 Investment and is currently generating about -0.21 per unit of risk. If you would invest 418,000 in FIT INVEST JSC on November 4, 2024 and sell it today you would lose (13,000) from holding FIT INVEST JSC or give up 3.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FIT INVEST JSC vs. Vina2 Investment and
Performance |
| Timeline |
| FIT INVEST JSC |
| Vina2 Investment |
FIT INVEST and Vina2 Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIT INVEST and Vina2 Investment
The main advantage of trading using opposite FIT INVEST and Vina2 Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIT INVEST position performs unexpectedly, Vina2 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 Vina2 Investment will offset losses from the drop in Vina2 Investment's long position.| FIT INVEST vs. Danang Education Investment | FIT INVEST vs. Mobile World Investment | FIT INVEST vs. Thanh Dat Investment | FIT INVEST vs. Vien Dong Investment |
| Vina2 Investment vs. Petrolimex Petrochemical JSC | Vina2 Investment vs. Vietnam Rubber Group | Vina2 Investment vs. Nafoods Group JSC | Vina2 Investment vs. Saigon Telecommunication Technologies |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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