Correlation Between FPT Digital and Tien Giang

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

By analyzing existing cross correlation between FPT Digital Retail and Tien Giang Investment, you can compare the effects of market volatilities on FPT Digital and Tien Giang 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 Digital with a short position of Tien Giang. Check out your portfolio center. Please also check ongoing floating volatility patterns of FPT Digital and Tien Giang.

Diversification Opportunities for FPT Digital and Tien Giang

-0.18

Correlation Coefficient

FPT Digital  Tien Giang

Good diversification

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

Pair Corralation between FPT Digital and Tien Giang

Assuming the 90 days trading horizon FPT Digital Retail is expected to under-perform the Tien Giang. But the stock apears to be less risky and, when comparing its historical volatility, FPT Digital Retail is 1.44 times less risky than Tien Giang. The stock trades about -0.02 of its potential returns per unit of risk. The Tien Giang Investment is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  4,493,833  in Tien Giang Investment on December 20, 2024 and sell it today you would earn a total of  1,256,167  from holding Tien Giang Investment or generate 27.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

FPT Digital Retail  vs.  Tien Giang Investment

FPT Digital Retail

Risk-Adjusted Performance

Very Weak

Over the last 90 days FPT Digital Retail has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, FPT Digital is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Tien Giang Investment

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tien Giang Investment are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Tien Giang displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FPT Digital and Tien Giang

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

The idea behind FPT Digital Retail and Tien Giang Investment 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 Stocks Directory module to find actively traded stocks across global markets.