Correlation Between FPT Digital and Damsan JSC
Can any of the company-specific risk be diversified away by investing in both FPT Digital and Damsan JSC 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 Digital and Damsan JSC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FPT Digital Retail and Damsan JSC, you can compare the effects of market volatilities on FPT Digital and Damsan JSC 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 Digital with a short position of Damsan JSC. Check out your portfolio center. Please also check ongoing floating volatility patterns of FPT Digital and Damsan JSC.
Diversification Opportunities for FPT Digital and Damsan JSC
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between FPT and Damsan is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding FPT Digital Retail and Damsan JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Damsan JSC and FPT Digital 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 Digital Retail are associated (or correlated) with Damsan JSC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Damsan JSC has no effect on the direction of FPT Digital i.e., FPT Digital and Damsan JSC go up and down completely randomly.
Pair Corralation between FPT Digital and Damsan JSC
Assuming the 90 days trading horizon FPT Digital Retail is expected to generate 0.77 times more return on investment than Damsan JSC. However, FPT Digital Retail is 1.3 times less risky than Damsan JSC. It trades about 0.15 of its potential returns per unit of risk. Damsan JSC is currently generating about -0.03 per unit of risk. If you would invest 6,420,000 in FPT Digital Retail on October 12, 2024 and sell it today you would earn a total of 12,030,000 from holding FPT Digital Retail or generate 187.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FPT Digital Retail vs. Damsan JSC
Performance |
| Timeline |
| FPT Digital Retail |
| Damsan JSC |
FPT Digital and Damsan JSC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FPT Digital and Damsan JSC
The main advantage of trading using opposite FPT Digital and Damsan JSC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FPT Digital position performs unexpectedly, Damsan JSC 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 Damsan JSC will offset losses from the drop in Damsan JSC's long position.| FPT Digital vs. VietinBank Securities JSC | FPT Digital vs. Din Capital Investment | FPT Digital vs. IDJ FINANCIAL | FPT Digital vs. Investment and Industrial |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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