Correlation Between Hung Hau and FPT Digital
Can any of the company-specific risk be diversified away by investing in both Hung Hau 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 Hung Hau and FPT Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hung Hau Agricultural and FPT Digital Retail, you can compare the effects of market volatilities on Hung Hau 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 Hung Hau with a short position of FPT Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hung Hau and FPT Digital.
Diversification Opportunities for Hung Hau and FPT Digital
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hung and FPT is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Hung Hau Agricultural 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 Hung Hau 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 Hung Hau Agricultural 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 Hung Hau i.e., Hung Hau and FPT Digital go up and down completely randomly.
Pair Corralation between Hung Hau and FPT Digital
Assuming the 90 days trading horizon Hung Hau Agricultural is expected to generate 2.71 times more return on investment than FPT Digital. However, Hung Hau is 2.71 times more volatile than FPT Digital Retail. It trades about 0.2 of its potential returns per unit of risk. FPT Digital Retail is currently generating about 0.21 per unit of risk. If you would invest 980,000 in Hung Hau Agricultural on September 2, 2024 and sell it today you would earn a total of 70,000 from holding Hung Hau Agricultural or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 54.55% |
| Values | Daily Returns |
Hung Hau Agricultural vs. FPT Digital Retail
Performance |
| Timeline |
| Hung Hau Agricultural |
| FPT Digital Retail |
Hung Hau and FPT Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hung Hau and FPT Digital
The main advantage of trading using opposite Hung Hau and FPT Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hung Hau 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.| Hung Hau vs. Song Hong Garment | Hung Hau vs. Alphanam ME | Hung Hau vs. Hochiminh City Metal | Hung Hau vs. Atesco Industrial Cartering |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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