Correlation Between FIT INVEST and Vinacomin NuiBeo

Can any of the company-specific risk be diversified away by investing in both FIT INVEST and Vinacomin NuiBeo 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 FIT INVEST and Vinacomin NuiBeo into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FIT INVEST JSC and Vinacomin NuiBeo Coal, you can compare the effects of market volatilities on FIT INVEST and Vinacomin NuiBeo 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 FIT INVEST with a short position of Vinacomin NuiBeo. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIT INVEST and Vinacomin NuiBeo.

Diversification Opportunities for FIT INVEST and Vinacomin NuiBeo

0.59

Correlation Coefficient

FIT INVEST  Vinacomin NuiBeo

Very weak diversification

The 3 months correlation between FIT and Vinacomin is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding FIT INVEST JSC and Vinacomin NuiBeo Coal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vinacomin NuiBeo Coal and FIT INVEST 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 FIT INVEST JSC are associated (or correlated) with Vinacomin NuiBeo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vinacomin NuiBeo Coal has no effect on the direction of FIT INVEST i.e., FIT INVEST and Vinacomin NuiBeo go up and down completely randomly.

Pair Corralation between FIT INVEST and Vinacomin NuiBeo

Assuming the 90 days trading horizon FIT INVEST JSC is expected to generate 0.93 times more return on investment than Vinacomin NuiBeo. However, FIT INVEST JSC is 1.08 times less risky than Vinacomin NuiBeo. It trades about -0.02 of its potential returns per unit of risk. Vinacomin NuiBeo Coal is currently generating about -0.14 per unit of risk. If you would invest  446,000  in FIT INVEST JSC on September 29, 2024 and sell it today you would lose (19,000) from holding FIT INVEST JSC or give up 4.26% of portfolio value over 90 days.

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

FIT INVEST JSC  vs.  Vinacomin NuiBeo Coal

FIT INVEST JSC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FIT INVEST JSC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, FIT INVEST is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Vinacomin NuiBeo Coal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vinacomin NuiBeo Coal has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with FIT INVEST and Vinacomin NuiBeo

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

The idea behind FIT INVEST JSC and Vinacomin NuiBeo Coal 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.