Correlation Between Vnsteel Vicasa and FPT Corp
Can any of the company-specific risk be diversified away by investing in both Vnsteel Vicasa 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 Vnsteel Vicasa and FPT Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vnsteel Vicasa JSC and FPT Corp, you can compare the effects of market volatilities on Vnsteel Vicasa 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 Vnsteel Vicasa with a short position of FPT Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vnsteel Vicasa and FPT Corp.
Diversification Opportunities for Vnsteel Vicasa and FPT Corp
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vnsteel and FPT is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Vnsteel Vicasa JSC and FPT Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FPT Corp and Vnsteel Vicasa 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 Vnsteel Vicasa JSC 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 Vnsteel Vicasa i.e., Vnsteel Vicasa and FPT Corp go up and down completely randomly.
Pair Corralation between Vnsteel Vicasa and FPT Corp
Assuming the 90 days trading horizon Vnsteel Vicasa JSC is expected to generate 3.29 times more return on investment than FPT Corp. However, Vnsteel Vicasa is 3.29 times more volatile than FPT Corp. It trades about 0.12 of its potential returns per unit of risk. FPT Corp is currently generating about 0.12 per unit of risk. If you would invest 857,000 in Vnsteel Vicasa JSC on November 2, 2024 and sell it today you would earn a total of 303,000 from holding Vnsteel Vicasa JSC or generate 35.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 72.82% |
| Values | Daily Returns |
Vnsteel Vicasa JSC vs. FPT Corp
Performance |
| Timeline |
| Vnsteel Vicasa JSC |
| FPT Corp |
Vnsteel Vicasa and FPT Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vnsteel Vicasa and FPT Corp
The main advantage of trading using opposite Vnsteel Vicasa and FPT Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vnsteel Vicasa 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.| Vnsteel Vicasa vs. AgriBank Securities JSC | Vnsteel Vicasa vs. Military Insurance Corp | Vnsteel Vicasa vs. Ducgiang Chemicals Detergent | Vnsteel Vicasa vs. Hochiminh City Metal |
| 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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