Correlation Between FPT Securities and FIT INVEST
Can any of the company-specific risk be diversified away by investing in both FPT Securities and FIT INVEST 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 Securities and FIT INVEST into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FPT Securities JSC and FIT INVEST JSC, you can compare the effects of market volatilities on FPT Securities and FIT INVEST 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 Securities with a short position of FIT INVEST. Check out your portfolio center. Please also check ongoing floating volatility patterns of FPT Securities and FIT INVEST.
Diversification Opportunities for FPT Securities and FIT INVEST
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FPT and FIT is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding FPT Securities JSC and FIT INVEST JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIT INVEST JSC and FPT Securities 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 Securities JSC are associated (or correlated) with FIT INVEST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIT INVEST JSC has no effect on the direction of FPT Securities i.e., FPT Securities and FIT INVEST go up and down completely randomly.
Pair Corralation between FPT Securities and FIT INVEST
Assuming the 90 days trading horizon FPT Securities JSC is expected to generate 1.27 times more return on investment than FIT INVEST. However, FPT Securities is 1.27 times more volatile than FIT INVEST JSC. It trades about 0.1 of its potential returns per unit of risk. FIT INVEST JSC is currently generating about 0.01 per unit of risk. If you would invest 1,295,532 in FPT Securities JSC on September 2, 2024 and sell it today you would earn a total of 3,164,468 from holding FPT Securities JSC or generate 244.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FPT Securities JSC vs. FIT INVEST JSC
Performance |
| Timeline |
| FPT Securities JSC |
| FIT INVEST JSC |
FPT Securities and FIT INVEST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FPT Securities and FIT INVEST
The main advantage of trading using opposite FPT Securities and FIT INVEST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FPT Securities position performs unexpectedly, FIT INVEST 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 FIT INVEST will offset losses from the drop in FIT INVEST's long position.| FPT Securities vs. FIT INVEST JSC | FPT Securities vs. Damsan JSC | FPT Securities vs. An Phat Plastic | FPT Securities vs. Alphanam ME |
| FIT INVEST vs. Damsan JSC | FIT INVEST vs. An Phat Plastic | FIT INVEST vs. Alphanam ME | FIT INVEST vs. Binhthuan Agriculture Services |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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