Correlation Between FIT INVEST and Binh Duong

Can any of the company-specific risk be diversified away by investing in both FIT INVEST and Binh Duong 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 Binh Duong 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 Binh Duong Trade, you can compare the effects of market volatilities on FIT INVEST and Binh Duong 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 Binh Duong. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIT INVEST and Binh Duong.

Diversification Opportunities for FIT INVEST and Binh Duong

-0.3

Correlation Coefficient

FIT INVEST  Binh Duong

Very good diversification

The 3 months correlation between FIT and Binh is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding FIT INVEST JSC and Binh Duong Trade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binh Duong Trade 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 Binh Duong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binh Duong Trade has no effect on the direction of FIT INVEST i.e., FIT INVEST and Binh Duong go up and down completely randomly.

Pair Corralation between FIT INVEST and Binh Duong

Assuming the 90 days trading horizon FIT INVEST JSC is expected to under-perform the Binh Duong. But the stock apears to be less risky and, when comparing its historical volatility, FIT INVEST JSC is 1.27 times less risky than Binh Duong. The stock trades about -0.05 of its potential returns per unit of risk. The Binh Duong Trade is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,270,000  in Binh Duong Trade on September 28, 2024 and sell it today you would lose (135,000) from holding Binh Duong Trade or give up 10.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.7%
Values	Daily Returns

FIT INVEST JSC  vs.  Binh Duong Trade

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.

Binh Duong Trade

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Binh Duong Trade are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Binh Duong may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with FIT INVEST and Binh Duong

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

The idea behind FIT INVEST JSC and Binh Duong Trade 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.