Correlation Between Snap and FPT Digital
Can any of the company-specific risk be diversified away by investing in both Snap 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 Snap and FPT Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and FPT Digital Retail, you can compare the effects of market volatilities on Snap 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 Snap with a short position of FPT Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and FPT Digital.
Diversification Opportunities for Snap and FPT Digital
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Snap and FPT is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc 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 Snap 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 Snap Inc 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 Snap i.e., Snap and FPT Digital go up and down completely randomly.
Pair Corralation between Snap and FPT Digital
Given the investment horizon of 90 days Snap Inc is expected to generate 3.69 times more return on investment than FPT Digital. However, Snap is 3.69 times more volatile than FPT Digital Retail. It trades about 0.1 of its potential returns per unit of risk. FPT Digital Retail is currently generating about 0.11 per unit of risk. If you would invest 1,071 in Snap Inc on August 28, 2024 and sell it today you would earn a total of 89.00 from holding Snap Inc or generate 8.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snap Inc vs. FPT Digital Retail
Performance |
| Timeline |
| Snap Inc |
| FPT Digital Retail |
Snap and FPT Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and FPT Digital
The main advantage of trading using opposite Snap and FPT Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap 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.The idea behind Snap Inc and FPT Digital Retail 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.| FPT Digital vs. FIT INVEST JSC | FPT Digital vs. Damsan JSC | FPT Digital vs. An Phat Plastic | FPT Digital vs. APG Securities Joint |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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