Correlation Between Vnsteel Vicasa and FPT Securities

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

By analyzing existing cross correlation between Vnsteel Vicasa JSC and FPT Securities JSC, you can compare the effects of market volatilities on Vnsteel Vicasa and FPT Securities 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 Vnsteel Vicasa with a short position of FPT Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vnsteel Vicasa and FPT Securities.

Diversification Opportunities for Vnsteel Vicasa and FPT Securities

0.68

Correlation Coefficient

Vnsteel Vicasa  FPT Securities

Poor diversification

The 3 months correlation between Vnsteel and FPT is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Vnsteel Vicasa JSC and FPT Securities JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FPT Securities JSC and Vnsteel Vicasa 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 Vnsteel Vicasa JSC are associated (or correlated) with FPT Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FPT Securities JSC has no effect on the direction of Vnsteel Vicasa i.e., Vnsteel Vicasa and FPT Securities go up and down completely randomly.

Pair Corralation between Vnsteel Vicasa and FPT Securities

Assuming the 90 days trading horizon Vnsteel Vicasa JSC is expected to under-perform the FPT Securities. In addition to that, Vnsteel Vicasa is 1.66 times more volatile than FPT Securities JSC. It trades about -0.06 of its total potential returns per unit of risk. FPT Securities JSC is currently generating about 0.17 per unit of volatility. If you would invest  4,260,000  in FPT Securities JSC on December 20, 2024 and sell it today you would earn a total of  780,000  from holding FPT Securities JSC or generate 18.31% return on investment over 90 days.

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

Vnsteel Vicasa JSC  vs.  FPT Securities JSC

Vnsteel Vicasa JSC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vnsteel Vicasa JSC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

FPT Securities JSC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FPT Securities JSC are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, FPT Securities displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vnsteel Vicasa and FPT Securities

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

The idea behind Vnsteel Vicasa JSC and FPT Securities 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.

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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.