Correlation Between Idico JSC and FPT CAPITAL

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

Diversification Opportunities for Idico JSC and FPT CAPITAL

0.32
  Correlation Coefficient

Weak diversification

The 3 months correlation between Idico and FPT is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Idico JSC and FPT CAPITAL VNX50 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FPT CAPITAL VNX50 and Idico JSC 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 Idico JSC are associated (or correlated) with FPT CAPITAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FPT CAPITAL VNX50 has no effect on the direction of Idico JSC i.e., Idico JSC and FPT CAPITAL go up and down completely randomly.

Pair Corralation between Idico JSC and FPT CAPITAL

Assuming the 90 days trading horizon Idico JSC is expected to generate 0.74 times more return on investment than FPT CAPITAL. However, Idico JSC is 1.35 times less risky than FPT CAPITAL. It trades about 0.09 of its potential returns per unit of risk. FPT CAPITAL VNX50 is currently generating about 0.01 per unit of risk. If you would invest  2,741,232  in Idico JSC on September 14, 2024 and sell it today you would earn a total of  2,898,768  from holding Idico JSC or generate 105.75% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy74.95%
ValuesDaily Returns

Idico JSC  vs.  FPT CAPITAL VNX50

 Performance 
       Timeline  
Idico JSC 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Idico JSC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Idico JSC is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.
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 latest unfluctuating performance, the Etf's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Idico JSC and FPT CAPITAL Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Idico JSC and FPT CAPITAL

The main advantage of trading using opposite Idico JSC and FPT CAPITAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Idico JSC position performs unexpectedly, FPT CAPITAL 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 FPT CAPITAL will offset losses from the drop in FPT CAPITAL's long position.
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The idea behind Idico JSC and FPT CAPITAL VNX50 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.
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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