Correlation Between FPT Digital and Ben Thanh
Can any of the company-specific risk be diversified away by investing in both FPT Digital and Ben Thanh 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 Ben Thanh 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 Ben Thanh Rubber, you can compare the effects of market volatilities on FPT Digital and Ben Thanh 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 Ben Thanh. Check out your portfolio center. Please also check ongoing floating volatility patterns of FPT Digital and Ben Thanh.
Diversification Opportunities for FPT Digital and Ben Thanh
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FPT and Ben is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding FPT Digital Retail and Ben Thanh Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ben Thanh Rubber 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 Ben Thanh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ben Thanh Rubber has no effect on the direction of FPT Digital i.e., FPT Digital and Ben Thanh go up and down completely randomly.
Pair Corralation between FPT Digital and Ben Thanh
Assuming the 90 days trading horizon FPT Digital Retail is expected to generate 1.32 times more return on investment than Ben Thanh. However, FPT Digital is 1.32 times more volatile than Ben Thanh Rubber. It trades about 0.38 of its potential returns per unit of risk. Ben Thanh Rubber is currently generating about -0.11 per unit of risk. If you would invest 18,600,000 in FPT Digital Retail on November 5, 2024 and sell it today you would earn a total of 1,900,000 from holding FPT Digital Retail or generate 10.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 93.75% |
| Values | Daily Returns |
FPT Digital Retail vs. Ben Thanh Rubber
Performance |
| Timeline |
| FPT Digital Retail |
| Ben Thanh Rubber |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
FPT Digital and Ben Thanh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FPT Digital and Ben Thanh
The main advantage of trading using opposite FPT Digital and Ben Thanh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FPT Digital position performs unexpectedly, Ben Thanh 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 Ben Thanh will offset losses from the drop in Ben Thanh's long position.| FPT Digital vs. Vu Dang Investment | FPT Digital vs. Elcom Technology Communications | FPT Digital vs. Petrolimex International Trading | FPT Digital vs. PetroVietnam Transportation Corp |
| Ben Thanh vs. Vietnam Rubber Group | Ben Thanh vs. Ducgiang Chemicals Detergent | Ben Thanh vs. FPT Digital Retail | Ben Thanh vs. AgriBank Securities JSC |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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