Correlation Between FPT Digital and Vietnam Technological
Can any of the company-specific risk be diversified away by investing in both FPT Digital and Vietnam Technological 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 Vietnam Technological 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 Vietnam Technological And, you can compare the effects of market volatilities on FPT Digital and Vietnam Technological 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 Vietnam Technological. Check out your portfolio center. Please also check ongoing floating volatility patterns of FPT Digital and Vietnam Technological.
Diversification Opportunities for FPT Digital and Vietnam Technological
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FPT and Vietnam is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding FPT Digital Retail and Vietnam Technological And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Technological And 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 Vietnam Technological. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Technological And has no effect on the direction of FPT Digital i.e., FPT Digital and Vietnam Technological go up and down completely randomly.
Pair Corralation between FPT Digital and Vietnam Technological
Assuming the 90 days trading horizon FPT Digital Retail is expected to generate 1.35 times more return on investment than Vietnam Technological. However, FPT Digital is 1.35 times more volatile than Vietnam Technological And. It trades about 0.29 of its potential returns per unit of risk. Vietnam Technological And is currently generating about 0.19 per unit of risk. If you would invest 18,600,000 in FPT Digital Retail on November 7, 2024 and sell it today you would earn a total of 1,540,000 from holding FPT Digital Retail or generate 8.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FPT Digital Retail vs. Vietnam Technological And
Performance |
| Timeline |
| FPT Digital Retail |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Vietnam Technological And |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
FPT Digital and Vietnam Technological Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FPT Digital and Vietnam Technological
The main advantage of trading using opposite FPT Digital and Vietnam Technological positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FPT Digital position performs unexpectedly, Vietnam Technological 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 Vietnam Technological will offset losses from the drop in Vietnam Technological's long position.The idea behind FPT Digital Retail and Vietnam Technological And pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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