Correlation Between IDJ FINANCIAL and FPT Digital
Can any of the company-specific risk be diversified away by investing in both IDJ FINANCIAL and FPT Digital 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 IDJ FINANCIAL and FPT Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IDJ FINANCIAL and FPT Digital Retail, you can compare the effects of market volatilities on IDJ FINANCIAL and FPT Digital 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 IDJ FINANCIAL with a short position of FPT Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of IDJ FINANCIAL and FPT Digital.
Diversification Opportunities for IDJ FINANCIAL and FPT Digital
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IDJ and FPT is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding IDJ FINANCIAL and FPT Digital Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FPT Digital Retail and IDJ FINANCIAL 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 IDJ FINANCIAL are associated (or correlated) with FPT Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FPT Digital Retail has no effect on the direction of IDJ FINANCIAL i.e., IDJ FINANCIAL and FPT Digital go up and down completely randomly.
Pair Corralation between IDJ FINANCIAL and FPT Digital
Assuming the 90 days trading horizon IDJ FINANCIAL is expected to under-perform the FPT Digital. In addition to that, IDJ FINANCIAL is 1.97 times more volatile than FPT Digital Retail. It trades about 0.0 of its total potential returns per unit of risk. FPT Digital Retail is currently generating about 0.12 per unit of volatility. If you would invest 6,329,338 in FPT Digital Retail on September 2, 2024 and sell it today you would earn a total of 11,520,662 from holding FPT Digital Retail or generate 182.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
IDJ FINANCIAL vs. FPT Digital Retail
Performance |
| Timeline |
| IDJ FINANCIAL |
| FPT Digital Retail |
IDJ FINANCIAL and FPT Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IDJ FINANCIAL and FPT Digital
The main advantage of trading using opposite IDJ FINANCIAL and FPT Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IDJ FINANCIAL position performs unexpectedly, FPT Digital 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 Digital will offset losses from the drop in FPT Digital's long position.| IDJ FINANCIAL vs. FIT INVEST JSC | IDJ FINANCIAL vs. Damsan JSC | IDJ FINANCIAL vs. An Phat Plastic | IDJ FINANCIAL vs. Alphanam ME |
| FPT Digital vs. FIT INVEST JSC | FPT Digital vs. Damsan JSC | FPT Digital vs. An Phat Plastic | FPT Digital vs. Alphanam ME |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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