Correlation Between FPT Corp and But Son

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

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

Diversification Opportunities for FPT Corp and But Son

-0.78

Correlation Coefficient

FPT Corp  But Son

Pay attention - limited upside

The 3 months correlation between FPT and But is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding FPT Corp and But Son Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on But Son Cement and FPT Corp 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 FPT Corp are associated (or correlated) with But Son. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of But Son Cement has no effect on the direction of FPT Corp i.e., FPT Corp and But Son go up and down completely randomly.

Pair Corralation between FPT Corp and But Son

Assuming the 90 days trading horizon FPT Corp is expected to generate 1.31 times more return on investment than But Son. However, FPT Corp is 1.31 times more volatile than But Son Cement. It trades about 0.24 of its potential returns per unit of risk. But Son Cement is currently generating about -0.09 per unit of risk. If you would invest  13,940,000  in FPT Corp on September 29, 2024 and sell it today you would earn a total of  1,020,000  from holding FPT Corp or generate 7.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	86.96%
Values	Daily Returns

FPT Corp  vs.  But Son Cement

FPT Corp

Risk-Adjusted Performance

10 of 100

OK

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

But Son Cement

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with FPT Corp and But Son

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

The idea behind FPT Corp and But Son Cement 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.