Correlation Between Bich Chi and FPT Corp
Can any of the company-specific risk be diversified away by investing in both Bich Chi 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 Bich Chi and FPT Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bich Chi Food and FPT Corp, you can compare the effects of market volatilities on Bich Chi 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 Bich Chi with a short position of FPT Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bich Chi and FPT Corp.
Diversification Opportunities for Bich Chi and FPT Corp
Poor diversification
The 3 months correlation between Bich and FPT is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Bich Chi Food and FPT Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FPT Corp and Bich Chi 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 Bich Chi Food 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 Bich Chi i.e., Bich Chi and FPT Corp go up and down completely randomly.
Pair Corralation between Bich Chi and FPT Corp
Assuming the 90 days trading horizon Bich Chi Food is expected to generate 2.08 times more return on investment than FPT Corp. However, Bich Chi is 2.08 times more volatile than FPT Corp. It trades about 0.11 of its potential returns per unit of risk. FPT Corp is currently generating about 0.1 per unit of risk. If you would invest 3,708,434 in Bich Chi Food on October 13, 2024 and sell it today you would earn a total of 291,566 from holding Bich Chi Food or generate 7.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 48.44% |
Values | Daily Returns |
Bich Chi Food vs. FPT Corp
Performance |
Timeline |
Bich Chi Food |
FPT Corp |
Bich Chi and FPT Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bich Chi and FPT Corp
The main advantage of trading using opposite Bich Chi and FPT Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bich Chi 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.Bich Chi vs. Kien Giang Construction | ||
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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