Correlation Between FPT Digital and Petrovietnam Technical
Can any of the company-specific risk be diversified away by investing in both FPT Digital and Petrovietnam Technical 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 Petrovietnam Technical 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 Petrovietnam Technical Services, you can compare the effects of market volatilities on FPT Digital and Petrovietnam Technical 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 Petrovietnam Technical. Check out your portfolio center. Please also check ongoing floating volatility patterns of FPT Digital and Petrovietnam Technical.
Diversification Opportunities for FPT Digital and Petrovietnam Technical
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FPT and Petrovietnam is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding FPT Digital Retail and Petrovietnam Technical Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrovietnam Technical 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 Petrovietnam Technical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrovietnam Technical has no effect on the direction of FPT Digital i.e., FPT Digital and Petrovietnam Technical go up and down completely randomly.
Pair Corralation between FPT Digital and Petrovietnam Technical
Assuming the 90 days trading horizon FPT Digital Retail is expected to generate 0.86 times more return on investment than Petrovietnam Technical. However, FPT Digital Retail is 1.16 times less risky than Petrovietnam Technical. It trades about 0.4 of its potential returns per unit of risk. Petrovietnam Technical Services is currently generating about -0.06 per unit of risk. If you would invest 18,260,000 in FPT Digital Retail on October 25, 2024 and sell it today you would earn a total of 1,840,000 from holding FPT Digital Retail or generate 10.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FPT Digital Retail vs. Petrovietnam Technical Service
Performance |
| Timeline |
| FPT Digital Retail |
| Petrovietnam Technical |
FPT Digital and Petrovietnam Technical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FPT Digital and Petrovietnam Technical
The main advantage of trading using opposite FPT Digital and Petrovietnam Technical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FPT Digital position performs unexpectedly, Petrovietnam Technical 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 Petrovietnam Technical will offset losses from the drop in Petrovietnam Technical's long position.| FPT Digital vs. FIT INVEST JSC | FPT Digital vs. Damsan JSC | FPT Digital vs. An Phat Plastic | FPT Digital vs. APG Securities Joint |
| Petrovietnam Technical vs. FIT INVEST JSC | Petrovietnam Technical vs. Damsan JSC | Petrovietnam Technical vs. An Phat Plastic | Petrovietnam Technical vs. APG Securities Joint |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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