Correlation Between POT and FIT INVEST
Can any of the company-specific risk be diversified away by investing in both POT and FIT INVEST 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 POT and FIT INVEST into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PostTelecommunication Equipment and FIT INVEST JSC, you can compare the effects of market volatilities on POT and FIT INVEST 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 POT with a short position of FIT INVEST. Check out your portfolio center. Please also check ongoing floating volatility patterns of POT and FIT INVEST.
Diversification Opportunities for POT and FIT INVEST
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between POT and FIT is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding PostTelecommunication Equipmen and FIT INVEST JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIT INVEST JSC and POT 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 PostTelecommunication Equipment are associated (or correlated) with FIT INVEST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIT INVEST JSC has no effect on the direction of POT i.e., POT and FIT INVEST go up and down completely randomly.
Pair Corralation between POT and FIT INVEST
Assuming the 90 days trading horizon PostTelecommunication Equipment is expected to generate 5.67 times more return on investment than FIT INVEST. However, POT is 5.67 times more volatile than FIT INVEST JSC. It trades about 0.01 of its potential returns per unit of risk. FIT INVEST JSC is currently generating about -0.2 per unit of risk. If you would invest 1,560,000 in PostTelecommunication Equipment on October 21, 2024 and sell it today you would lose (10,000) from holding PostTelecommunication Equipment or give up 0.64% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 57.14% |
Values | Daily Returns |
PostTelecommunication Equipmen vs. FIT INVEST JSC
Performance |
Timeline |
PostTelecommunication |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
FIT INVEST JSC |
POT and FIT INVEST Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with POT and FIT INVEST
The main advantage of trading using opposite POT and FIT INVEST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POT position performs unexpectedly, FIT INVEST 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 FIT INVEST will offset losses from the drop in FIT INVEST's long position.The idea behind PostTelecommunication Equipment and FIT INVEST JSC 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.FIT INVEST vs. Saigon Viendong Technology | FIT INVEST vs. Petrovietnam Technical Services | FIT INVEST vs. VTC Telecommunications JSC | FIT INVEST vs. Vietnam Petroleum Transport |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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