Correlation Between Vu Dang and FPT Digital

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

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

Diversification Opportunities for Vu Dang and FPT Digital

0.33

Correlation Coefficient

Vu Dang  FPT Digital

Weak diversification

The 3 months correlation between SVD and FPT is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Vu Dang Investment and FPT Digital Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FPT Digital Retail and Vu Dang 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 Vu Dang Investment are associated (or correlated) with FPT Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FPT Digital Retail has no effect on the direction of Vu Dang i.e., Vu Dang and FPT Digital go up and down completely randomly.

Pair Corralation between Vu Dang and FPT Digital

Assuming the 90 days trading horizon Vu Dang is expected to generate 4.78 times less return on investment than FPT Digital. In addition to that, Vu Dang is 2.05 times more volatile than FPT Digital Retail. It trades about 0.04 of its total potential returns per unit of risk. FPT Digital Retail is currently generating about 0.4 per unit of volatility. If you would invest  18,260,000  in FPT Digital Retail on October 25, 2024 and sell it today you would earn a total of  1,840,000  from holding FPT Digital Retail or generate 10.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Vu Dang Investment  vs.  FPT Digital Retail

Vu Dang Investment

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vu Dang Investment are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Vu Dang is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

FPT Digital Retail

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in FPT Digital Retail are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, FPT Digital displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vu Dang and FPT Digital

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

The idea behind Vu Dang Investment and FPT Digital Retail 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..