Correlation Between FPT Corp and Dong A
Can any of the company-specific risk be diversified away by investing in both FPT Corp and Dong A 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 Dong A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FPT Corp and Dong A Hotel, you can compare the effects of market volatilities on FPT Corp and Dong A 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 Dong A. Check out your portfolio center. Please also check ongoing floating volatility patterns of FPT Corp and Dong A.
Diversification Opportunities for FPT Corp and Dong A
Very weak diversification
The 3 months correlation between FPT and Dong is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding FPT Corp and Dong A Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dong A Hotel 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 Dong A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dong A Hotel has no effect on the direction of FPT Corp i.e., FPT Corp and Dong A go up and down completely randomly.
Pair Corralation between FPT Corp and Dong A
Assuming the 90 days trading horizon FPT Corp is expected to under-perform the Dong A. But the stock apears to be less risky and, when comparing its historical volatility, FPT Corp is 4.86 times less risky than Dong A. The stock trades about -0.09 of its potential returns per unit of risk. The Dong A Hotel is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 303,000 in Dong A Hotel on October 18, 2024 and sell it today you would earn a total of 24,000 from holding Dong A Hotel or generate 7.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FPT Corp vs. Dong A Hotel
Performance |
| Timeline |
| FPT Corp |
| Dong A Hotel |
FPT Corp and Dong A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FPT Corp and Dong A
The main advantage of trading using opposite FPT Corp and Dong A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FPT Corp position performs unexpectedly, Dong A 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 Dong A will offset losses from the drop in Dong A's long position.| FPT Corp vs. FIT INVEST JSC | FPT Corp vs. Damsan JSC | FPT Corp vs. An Phat Plastic | FPT Corp vs. APG Securities Joint |
| Dong A vs. Tien Phong Plastic | Dong A vs. An Phat Holdings | Dong A vs. FPT Corp | Dong A vs. POST TELECOMMU |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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