Correlation Between FIT INVEST and HVC Investment
Can any of the company-specific risk be diversified away by investing in both FIT INVEST and HVC Investment 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 FIT INVEST and HVC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIT INVEST JSC and HVC Investment and, you can compare the effects of market volatilities on FIT INVEST and HVC Investment 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 FIT INVEST with a short position of HVC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIT INVEST and HVC Investment.
Diversification Opportunities for FIT INVEST and HVC Investment
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between FIT and HVC is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding FIT INVEST JSC and HVC Investment and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HVC Investment and FIT INVEST 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 FIT INVEST JSC are associated (or correlated) with HVC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HVC Investment has no effect on the direction of FIT INVEST i.e., FIT INVEST and HVC Investment go up and down completely randomly.
Pair Corralation between FIT INVEST and HVC Investment
Assuming the 90 days trading horizon FIT INVEST is expected to generate 1.51 times less return on investment than HVC Investment. But when comparing it to its historical volatility, FIT INVEST JSC is 1.27 times less risky than HVC Investment. It trades about 0.03 of its potential returns per unit of risk. HVC Investment and is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 849,000 in HVC Investment and on September 15, 2024 and sell it today you would earn a total of 27,000 from holding HVC Investment and or generate 3.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
FIT INVEST JSC vs. HVC Investment and
Performance |
Timeline |
FIT INVEST JSC |
HVC Investment |
FIT INVEST and HVC Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FIT INVEST and HVC Investment
The main advantage of trading using opposite FIT INVEST and HVC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIT INVEST position performs unexpectedly, HVC Investment 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 HVC Investment will offset losses from the drop in HVC Investment's long position.FIT INVEST vs. Cotec Construction JSC | FIT INVEST vs. Vietnam National Reinsurance | FIT INVEST vs. Sea Air Freight | FIT INVEST vs. SCG Construction JSC |
HVC Investment vs. FIT INVEST JSC | HVC Investment vs. Damsan JSC | HVC Investment vs. An Phat Plastic | HVC Investment vs. Alphanam ME |
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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