Correlation Between FPT Digital and Van Dien
Can any of the company-specific risk be diversified away by investing in both FPT Digital and Van Dien 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 Van Dien 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 Van Dien Fused, you can compare the effects of market volatilities on FPT Digital and Van Dien 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 Van Dien. Check out your portfolio center. Please also check ongoing floating volatility patterns of FPT Digital and Van Dien.
Diversification Opportunities for FPT Digital and Van Dien
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FPT and Van is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding FPT Digital Retail and Van Dien Fused in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Van Dien Fused 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 Van Dien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Van Dien Fused has no effect on the direction of FPT Digital i.e., FPT Digital and Van Dien go up and down completely randomly.
Pair Corralation between FPT Digital and Van Dien
Assuming the 90 days trading horizon FPT Digital Retail is expected to generate 0.48 times more return on investment than Van Dien. However, FPT Digital Retail is 2.1 times less risky than Van Dien. It trades about 0.14 of its potential returns per unit of risk. Van Dien Fused is currently generating about 0.05 per unit of risk. If you would invest 10,150,000 in FPT Digital Retail on September 14, 2024 and sell it today you would earn a total of 8,040,000 from holding FPT Digital Retail or generate 79.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 74.25% |
| Values | Daily Returns |
FPT Digital Retail vs. Van Dien Fused
Performance |
| Timeline |
| FPT Digital Retail |
| Van Dien Fused |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
FPT Digital and Van Dien Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FPT Digital and Van Dien
The main advantage of trading using opposite FPT Digital and Van Dien positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FPT Digital position performs unexpectedly, Van Dien 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 Van Dien will offset losses from the drop in Van Dien'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 |
| Van Dien vs. Elcom Technology Communications | Van Dien vs. Materials Petroleum JSC | Van Dien vs. Danang Rubber JSC | Van Dien vs. FPT Digital Retail |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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