Correlation Between FPT Securities and FPT Corp
Can any of the company-specific risk be diversified away by investing in both FPT Securities 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 FPT Securities and FPT Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FPT Securities JSC and FPT Corp, you can compare the effects of market volatilities on FPT Securities 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 FPT Securities with a short position of FPT Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of FPT Securities and FPT Corp.
Diversification Opportunities for FPT Securities and FPT Corp
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between FPT and FPT is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding FPT Securities JSC and FPT Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FPT Corp and FPT 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 FPT Securities JSC 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 FPT Securities i.e., FPT Securities and FPT Corp go up and down completely randomly.
Pair Corralation between FPT Securities and FPT Corp
Assuming the 90 days trading horizon FPT Securities JSC is expected to generate 1.95 times more return on investment than FPT Corp. However, FPT Securities is 1.95 times more volatile than FPT Corp. It trades about 0.1 of its potential returns per unit of risk. FPT Corp is currently generating about 0.12 per unit of risk. If you would invest 1,245,220 in FPT Securities JSC on October 4, 2024 and sell it today you would earn a total of 3,034,780 from holding FPT Securities JSC or generate 243.71% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 99.8% |
Values | Daily Returns |
FPT Securities JSC vs. FPT Corp
Performance |
Timeline |
FPT Securities JSC |
FPT Corp |
FPT Securities and FPT Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FPT Securities and FPT Corp
The main advantage of trading using opposite FPT Securities and FPT Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FPT Securities 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.FPT Securities vs. Viet Nam Construction | FPT Securities vs. Din Capital Investment | FPT Securities vs. Saigon Machinery Spare | FPT Securities vs. Construction And Investment |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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