Correlation Between FPT Corp and Educational Book

Can any of the company-specific risk be diversified away by investing in both FPT Corp and Educational Book 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 FPT Corp and Educational Book into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FPT Corp and Educational Book In, you can compare the effects of market volatilities on FPT Corp and Educational Book 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 FPT Corp with a short position of Educational Book. Check out your portfolio center. Please also check ongoing floating volatility patterns of FPT Corp and Educational Book.

Diversification Opportunities for FPT Corp and Educational Book

0.18

Correlation Coefficient

FPT Corp  Educational Book

Average diversification

The 3 months correlation between FPT and Educational is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding FPT Corp and Educational Book In in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Educational Book and FPT Corp 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 FPT Corp are associated (or correlated) with Educational Book. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Educational Book has no effect on the direction of FPT Corp i.e., FPT Corp and Educational Book go up and down completely randomly.

Pair Corralation between FPT Corp and Educational Book

Assuming the 90 days trading horizon FPT Corp is expected to generate 0.44 times more return on investment than Educational Book. However, FPT Corp is 2.25 times less risky than Educational Book. It trades about 0.23 of its potential returns per unit of risk. Educational Book In is currently generating about 0.01 per unit of risk. If you would invest  13,460,000  in FPT Corp on October 7, 2024 and sell it today you would earn a total of  1,740,000  from holding FPT Corp or generate 12.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	57.14%
Values	Daily Returns

FPT Corp  vs.  Educational Book In

FPT Corp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FPT Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, FPT Corp displayed solid returns over the last few months and may actually be approaching a breakup point.

Educational Book

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Educational Book In are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Educational Book displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FPT Corp and Educational Book

The main advantage of trading using opposite FPT Corp and Educational Book positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FPT Corp position performs unexpectedly, Educational Book 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 Educational Book will offset losses from the drop in Educational Book's long position.

The idea behind FPT Corp and Educational Book In pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.