Correlation Between Guangzhou Dongfang and Fiberhome Telecommunicatio
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By analyzing existing cross correlation between Guangzhou Dongfang Hotel and Fiberhome Telecommunication Technologies, you can compare the effects of market volatilities on Guangzhou Dongfang and Fiberhome Telecommunicatio 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 Guangzhou Dongfang with a short position of Fiberhome Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Dongfang and Fiberhome Telecommunicatio.
Diversification Opportunities for Guangzhou Dongfang and Fiberhome Telecommunicatio
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Guangzhou and Fiberhome is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Dongfang Hotel and Fiberhome Telecommunication Te in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiberhome Telecommunicatio and Guangzhou Dongfang 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 Guangzhou Dongfang Hotel are associated (or correlated) with Fiberhome Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fiberhome Telecommunicatio has no effect on the direction of Guangzhou Dongfang i.e., Guangzhou Dongfang and Fiberhome Telecommunicatio go up and down completely randomly.
Pair Corralation between Guangzhou Dongfang and Fiberhome Telecommunicatio
Assuming the 90 days trading horizon Guangzhou Dongfang is expected to generate 2.07 times less return on investment than Fiberhome Telecommunicatio. But when comparing it to its historical volatility, Guangzhou Dongfang Hotel is 1.75 times less risky than Fiberhome Telecommunicatio. It trades about 0.16 of its potential returns per unit of risk. Fiberhome Telecommunication Technologies is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,721 in Fiberhome Telecommunication Technologies on November 6, 2024 and sell it today you would earn a total of 169.00 from holding Fiberhome Telecommunication Technologies or generate 9.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Dongfang Hotel vs. Fiberhome Telecommunication Te
Performance |
| Timeline |
| Guangzhou Dongfang Hotel |
| Fiberhome Telecommunicatio |
Guangzhou Dongfang and Fiberhome Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Dongfang and Fiberhome Telecommunicatio
The main advantage of trading using opposite Guangzhou Dongfang and Fiberhome Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Dongfang position performs unexpectedly, Fiberhome Telecommunicatio 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 Fiberhome Telecommunicatio will offset losses from the drop in Fiberhome Telecommunicatio's long position.| Guangzhou Dongfang vs. V V Food | Guangzhou Dongfang vs. Shanghai Ziyan Foods | Guangzhou Dongfang vs. Dongfeng Automobile Co | Guangzhou Dongfang vs. HaiXin Foods Co |
Check out your portfolio center.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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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