Correlation Between FPT Digital and Nam Kim
Can any of the company-specific risk be diversified away by investing in both FPT Digital and Nam Kim 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 Nam Kim 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 Nam Kim Steel, you can compare the effects of market volatilities on FPT Digital and Nam Kim 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 Nam Kim. Check out your portfolio center. Please also check ongoing floating volatility patterns of FPT Digital and Nam Kim.
Diversification Opportunities for FPT Digital and Nam Kim
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FPT and Nam is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding FPT Digital Retail and Nam Kim Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nam Kim Steel 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 Nam Kim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nam Kim Steel has no effect on the direction of FPT Digital i.e., FPT Digital and Nam Kim go up and down completely randomly.
Pair Corralation between FPT Digital and Nam Kim
Assuming the 90 days trading horizon FPT Digital Retail is expected to generate 0.57 times more return on investment than Nam Kim. However, FPT Digital Retail is 1.77 times less risky than Nam Kim. It trades about 0.31 of its potential returns per unit of risk. Nam Kim Steel is currently generating about -0.2 per unit of risk. If you would invest 16,900,000 in FPT Digital Retail on September 13, 2024 and sell it today you would earn a total of 1,250,000 from holding FPT Digital Retail or generate 7.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FPT Digital Retail vs. Nam Kim Steel
Performance |
| Timeline |
| FPT Digital Retail |
| Nam Kim Steel |
FPT Digital and Nam Kim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FPT Digital and Nam Kim
The main advantage of trading using opposite FPT Digital and Nam Kim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FPT Digital position performs unexpectedly, Nam Kim 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 Nam Kim will offset losses from the drop in Nam Kim'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 |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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