Correlation Between Vincom Retail and FPT Securities

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

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

Diversification Opportunities for Vincom Retail and FPT Securities

0.18

Correlation Coefficient

Vincom Retail  FPT Securities

Average diversification

The 3 months correlation between Vincom and FPT is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Vincom Retail 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 Vincom Retail 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 Vincom Retail 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 Vincom Retail i.e., Vincom Retail and FPT Securities go up and down completely randomly.

Pair Corralation between Vincom Retail and FPT Securities

Assuming the 90 days trading horizon Vincom Retail JSC is expected to generate 0.54 times more return on investment than FPT Securities. However, Vincom Retail JSC is 1.86 times less risky than FPT Securities. It trades about -0.25 of its potential returns per unit of risk. FPT Securities JSC is currently generating about -0.37 per unit of risk. If you would invest  1,770,000  in Vincom Retail JSC on October 9, 2024 and sell it today you would lose (55,000) from holding Vincom Retail JSC or give up 3.11% of portfolio value over 90 days.

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

Vincom Retail JSC  vs.  FPT Securities JSC

Vincom Retail JSC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vincom Retail JSC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental 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

0 of 100

Very Weak

Over the last 90 days FPT Securities 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.

Pair Trading with Vincom Retail and FPT Securities

The main advantage of trading using opposite Vincom Retail and FPT Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vincom Retail 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 Vincom Retail 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.