Correlation Between Maoming Petro and Fiberhome Telecommunicatio
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By analyzing existing cross correlation between Maoming Petro Chemical Shihua and Fiberhome Telecommunication Technologies, you can compare the effects of market volatilities on Maoming Petro 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 Maoming Petro with a short position of Fiberhome Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maoming Petro and Fiberhome Telecommunicatio.
Diversification Opportunities for Maoming Petro and Fiberhome Telecommunicatio
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Maoming and Fiberhome is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Maoming Petro Chemical Shihua and Fiberhome Telecommunication Te in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiberhome Telecommunicatio and Maoming Petro 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 Maoming Petro Chemical Shihua 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 Maoming Petro i.e., Maoming Petro and Fiberhome Telecommunicatio go up and down completely randomly.
Pair Corralation between Maoming Petro and Fiberhome Telecommunicatio
Assuming the 90 days trading horizon Maoming Petro Chemical Shihua is expected to generate 1.05 times more return on investment than Fiberhome Telecommunicatio. However, Maoming Petro is 1.05 times more volatile than Fiberhome Telecommunication Technologies. It trades about 0.16 of its potential returns per unit of risk. Fiberhome Telecommunication Technologies is currently generating about 0.0 per unit of risk. If you would invest 366.00 in Maoming Petro Chemical Shihua on September 2, 2024 and sell it today you would earn a total of 34.00 from holding Maoming Petro Chemical Shihua or generate 9.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maoming Petro Chemical Shihua vs. Fiberhome Telecommunication Te
Performance |
| Timeline |
| Maoming Petro Chemical |
| Fiberhome Telecommunicatio |
Maoming Petro and Fiberhome Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maoming Petro and Fiberhome Telecommunicatio
The main advantage of trading using opposite Maoming Petro and Fiberhome Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maoming Petro 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.| Maoming Petro vs. Zijin Mining Group | Maoming Petro vs. Wanhua Chemical Group | Maoming Petro vs. Baoshan Iron Steel | Maoming Petro vs. Shandong Gold Mining |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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