Correlation Between VNDIRECT Securities and FIT INVEST
Can any of the company-specific risk be diversified away by investing in both VNDIRECT Securities and FIT INVEST 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 VNDIRECT Securities and FIT INVEST into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VNDIRECT Securities Corp and FIT INVEST JSC, you can compare the effects of market volatilities on VNDIRECT Securities and FIT INVEST 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 VNDIRECT Securities with a short position of FIT INVEST. Check out your portfolio center. Please also check ongoing floating volatility patterns of VNDIRECT Securities and FIT INVEST.
Diversification Opportunities for VNDIRECT Securities and FIT INVEST
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between VNDIRECT and FIT is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding VNDIRECT Securities Corp and FIT INVEST JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIT INVEST JSC and VNDIRECT Securities 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 VNDIRECT Securities Corp are associated (or correlated) with FIT INVEST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIT INVEST JSC has no effect on the direction of VNDIRECT Securities i.e., VNDIRECT Securities and FIT INVEST go up and down completely randomly.
Pair Corralation between VNDIRECT Securities and FIT INVEST
Assuming the 90 days trading horizon VNDIRECT Securities Corp is expected to generate 1.12 times more return on investment than FIT INVEST. However, VNDIRECT Securities is 1.12 times more volatile than FIT INVEST JSC. It trades about -0.15 of its potential returns per unit of risk. FIT INVEST JSC is currently generating about -0.18 per unit of risk. If you would invest 1,450,000 in VNDIRECT Securities Corp on August 31, 2024 and sell it today you would lose (60,000) from holding VNDIRECT Securities Corp or give up 4.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VNDIRECT Securities Corp vs. FIT INVEST JSC
Performance |
| Timeline |
| VNDIRECT Securities Corp |
| FIT INVEST JSC |
VNDIRECT Securities and FIT INVEST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VNDIRECT Securities and FIT INVEST
The main advantage of trading using opposite VNDIRECT Securities and FIT INVEST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VNDIRECT Securities position performs unexpectedly, FIT INVEST 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 FIT INVEST will offset losses from the drop in FIT INVEST's long position.| VNDIRECT Securities vs. BaoMinh Insurance Corp | VNDIRECT Securities vs. Tien Phong Plastic | VNDIRECT Securities vs. VietinBank Securities JSC | VNDIRECT Securities vs. Viet Thanh Plastic |
| FIT INVEST vs. Plastic Additives JSC | FIT INVEST vs. Picomat Plastic JSC | FIT INVEST vs. Hanoi Beer Alcohol | FIT INVEST vs. Military Insurance Corp |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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