Correlation Between FPT Corp and BIDV Insurance
Can any of the company-specific risk be diversified away by investing in both FPT Corp and BIDV Insurance 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 FPT Corp and BIDV Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FPT Corp and BIDV Insurance Corp, you can compare the effects of market volatilities on FPT Corp and BIDV Insurance 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 FPT Corp with a short position of BIDV Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of FPT Corp and BIDV Insurance.
Diversification Opportunities for FPT Corp and BIDV Insurance
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FPT and BIDV is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding FPT Corp and BIDV Insurance Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIDV Insurance Corp and FPT Corp 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 FPT Corp are associated (or correlated) with BIDV Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIDV Insurance Corp has no effect on the direction of FPT Corp i.e., FPT Corp and BIDV Insurance go up and down completely randomly.
Pair Corralation between FPT Corp and BIDV Insurance
Assuming the 90 days trading horizon FPT Corp is expected to generate 0.86 times more return on investment than BIDV Insurance. However, FPT Corp is 1.16 times less risky than BIDV Insurance. It trades about 0.01 of its potential returns per unit of risk. BIDV Insurance Corp is currently generating about -0.06 per unit of risk. If you would invest 14,980,000 in FPT Corp on October 24, 2024 and sell it today you would earn a total of 10,000 from holding FPT Corp or generate 0.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
FPT Corp vs. BIDV Insurance Corp
Performance |
| Timeline |
| FPT Corp |
| BIDV Insurance Corp |
FPT Corp and BIDV Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FPT Corp and BIDV Insurance
The main advantage of trading using opposite FPT Corp and BIDV Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FPT Corp position performs unexpectedly, BIDV Insurance 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 BIDV Insurance will offset losses from the drop in BIDV Insurance's long position.| FPT Corp vs. Taseco Air Services | FPT Corp vs. Sea Air Freight | FPT Corp vs. Kien Giang Construction | FPT Corp vs. Binh Duong Trade |
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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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