Correlation Between FPT CAPITAL and Vietnam Maritime

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Can any of the company-specific risk be diversified away by investing in both FPT CAPITAL and Vietnam Maritime 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 CAPITAL and Vietnam Maritime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FPT CAPITAL VNX50 and Vietnam Maritime Development, you can compare the effects of market volatilities on FPT CAPITAL and Vietnam Maritime 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 CAPITAL with a short position of Vietnam Maritime. Check out your portfolio center. Please also check ongoing floating volatility patterns of FPT CAPITAL and Vietnam Maritime.

Diversification Opportunities for FPT CAPITAL and Vietnam Maritime

-0.09
  Correlation Coefficient

Good diversification

The 3 months correlation between FPT and Vietnam is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding FPT CAPITAL VNX50 and Vietnam Maritime Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Maritime Dev and FPT CAPITAL 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 CAPITAL VNX50 are associated (or correlated) with Vietnam Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Maritime Dev has no effect on the direction of FPT CAPITAL i.e., FPT CAPITAL and Vietnam Maritime go up and down completely randomly.

Pair Corralation between FPT CAPITAL and Vietnam Maritime

Assuming the 90 days trading horizon FPT CAPITAL VNX50 is expected to under-perform the Vietnam Maritime. But the etf apears to be less risky and, when comparing its historical volatility, FPT CAPITAL VNX50 is 4.03 times less risky than Vietnam Maritime. The etf trades about -0.03 of its potential returns per unit of risk. The Vietnam Maritime Development is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  2,200,000  in Vietnam Maritime Development on November 2, 2024 and sell it today you would earn a total of  110,000  from holding Vietnam Maritime Development or generate 5.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy58.25%
ValuesDaily Returns

FPT CAPITAL VNX50  vs.  Vietnam Maritime Development

 Performance 
       Timeline  
FPT CAPITAL VNX50 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days FPT CAPITAL VNX50 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, FPT CAPITAL is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.
Vietnam Maritime Dev 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Weak
Over the last 90 days Vietnam Maritime Development has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very unfluctuating basic indicators, Vietnam Maritime displayed solid returns over the last few months and may actually be approaching a breakup point.

FPT CAPITAL and Vietnam Maritime Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with FPT CAPITAL and Vietnam Maritime

The main advantage of trading using opposite FPT CAPITAL and Vietnam Maritime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FPT CAPITAL position performs unexpectedly, Vietnam Maritime 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 Maritime will offset losses from the drop in Vietnam Maritime's long position.
The idea behind FPT CAPITAL VNX50 and Vietnam Maritime Development 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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