Correlation Between Visa and FPT Corp
Can any of the company-specific risk be diversified away by investing in both Visa and FPT Corp 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 Visa and FPT Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and FPT Corp, you can compare the effects of market volatilities on Visa and FPT Corp 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 Visa with a short position of FPT Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and FPT Corp.
Diversification Opportunities for Visa and FPT Corp
Poor diversification
The 3 months correlation between Visa and FPT is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and FPT Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FPT Corp and Visa 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 Visa Class A are associated (or correlated) with FPT Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FPT Corp has no effect on the direction of Visa i.e., Visa and FPT Corp go up and down completely randomly.
Pair Corralation between Visa and FPT Corp
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.01 times more return on investment than FPT Corp. However, Visa is 1.01 times more volatile than FPT Corp. It trades about 0.1 of its potential returns per unit of risk. FPT Corp is currently generating about 0.09 per unit of risk. If you would invest 28,793 in Visa Class A on October 18, 2024 and sell it today you would earn a total of 2,835 from holding Visa Class A or generate 9.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.47% |
| Values | Daily Returns |
Visa Class A vs. FPT Corp
Performance |
| Timeline |
| Visa Class A |
| FPT Corp |
Visa and FPT Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and FPT Corp
The main advantage of trading using opposite Visa and FPT Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, FPT Corp 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 Corp will offset losses from the drop in FPT Corp's long position.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| FPT Corp vs. FIT INVEST JSC | FPT Corp vs. Damsan JSC | FPT Corp vs. An Phat Plastic | FPT Corp 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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