Correlation Between FPT Digital and Danang Rubber
Can any of the company-specific risk be diversified away by investing in both FPT Digital and Danang Rubber 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 Danang Rubber 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 Danang Rubber JSC, you can compare the effects of market volatilities on FPT Digital and Danang Rubber 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 Danang Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of FPT Digital and Danang Rubber.
Diversification Opportunities for FPT Digital and Danang Rubber
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FPT and Danang is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding FPT Digital Retail and Danang Rubber JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danang Rubber 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 Danang Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danang Rubber JSC has no effect on the direction of FPT Digital i.e., FPT Digital and Danang Rubber go up and down completely randomly.
Pair Corralation between FPT Digital and Danang Rubber
Assuming the 90 days trading horizon FPT Digital Retail is expected to generate 0.83 times more return on investment than Danang Rubber. However, FPT Digital Retail is 1.21 times less risky than Danang Rubber. It trades about 0.14 of its potential returns per unit of risk. Danang Rubber JSC is currently generating about 0.05 per unit of risk. If you would invest 10,190,000 in FPT Digital Retail on September 2, 2024 and sell it today you would earn a total of 7,660,000 from holding FPT Digital Retail or generate 75.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
FPT Digital Retail vs. Danang Rubber JSC
Performance |
| Timeline |
| FPT Digital Retail |
| Danang Rubber JSC |
FPT Digital and Danang Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FPT Digital and Danang Rubber
The main advantage of trading using opposite FPT Digital and Danang Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FPT Digital position performs unexpectedly, Danang Rubber 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 Danang Rubber will offset losses from the drop in Danang Rubber's long position.| FPT Digital vs. FIT INVEST JSC | FPT Digital vs. Damsan JSC | FPT Digital vs. An Phat Plastic | FPT Digital vs. Alphanam ME |
| Danang Rubber vs. FIT INVEST JSC | Danang Rubber vs. Damsan JSC | Danang Rubber vs. An Phat Plastic | Danang Rubber vs. Alphanam ME |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |