Correlation Between Binh Duong and FPT Digital
Can any of the company-specific risk be diversified away by investing in both Binh Duong 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 Binh Duong and FPT Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binh Duong Trade and FPT Digital Retail, you can compare the effects of market volatilities on Binh Duong 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 Binh Duong with a short position of FPT Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binh Duong and FPT Digital.
Diversification Opportunities for Binh Duong and FPT Digital
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Binh and FPT is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Binh Duong Trade 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 Binh Duong 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 Binh Duong Trade 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 Binh Duong i.e., Binh Duong and FPT Digital go up and down completely randomly.
Pair Corralation between Binh Duong and FPT Digital
Assuming the 90 days trading horizon Binh Duong Trade is expected to generate 1.52 times more return on investment than FPT Digital. However, Binh Duong is 1.52 times more volatile than FPT Digital Retail. It trades about 0.06 of its potential returns per unit of risk. FPT Digital Retail is currently generating about -0.08 per unit of risk. If you would invest 1,130,000 in Binh Duong Trade on December 27, 2024 and sell it today you would earn a total of 75,000 from holding Binh Duong Trade or generate 6.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Binh Duong Trade vs. FPT Digital Retail
Performance |
Timeline |
Binh Duong Trade |
FPT Digital Retail |
Binh Duong and FPT Digital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Binh Duong and FPT Digital
The main advantage of trading using opposite Binh Duong and FPT Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binh Duong 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.Binh Duong vs. South Basic Chemicals | Binh Duong vs. Saigon Telecommunication Technologies | Binh Duong vs. Mobile World Investment | Binh Duong vs. Nafoods Group JSC |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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