Correlation Between Focus Media and Hefei Metalforming
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By analyzing existing cross correlation between Focus Media Information and Hefei Metalforming Mach, you can compare the effects of market volatilities on Focus Media and Hefei Metalforming 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 Focus Media with a short position of Hefei Metalforming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Media and Hefei Metalforming.
Diversification Opportunities for Focus Media and Hefei Metalforming
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Focus and Hefei is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Focus Media Information and Hefei Metalforming Mach in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hefei Metalforming Mach and Focus Media 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 Focus Media Information are associated (or correlated) with Hefei Metalforming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hefei Metalforming Mach has no effect on the direction of Focus Media i.e., Focus Media and Hefei Metalforming go up and down completely randomly.
Pair Corralation between Focus Media and Hefei Metalforming
Assuming the 90 days trading horizon Focus Media Information is expected to under-perform the Hefei Metalforming. But the stock apears to be less risky and, when comparing its historical volatility, Focus Media Information is 2.63 times less risky than Hefei Metalforming. The stock trades about -0.21 of its potential returns per unit of risk. The Hefei Metalforming Mach is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 725.00 in Hefei Metalforming Mach on August 30, 2024 and sell it today you would earn a total of 45.00 from holding Hefei Metalforming Mach or generate 6.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Focus Media Information vs. Hefei Metalforming Mach
Performance |
| Timeline |
| Focus Media Information |
| Hefei Metalforming Mach |
Focus Media and Hefei Metalforming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focus Media and Hefei Metalforming
The main advantage of trading using opposite Focus Media and Hefei Metalforming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Media position performs unexpectedly, Hefei Metalforming 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 Hefei Metalforming will offset losses from the drop in Hefei Metalforming's long position.| Focus Media vs. CareRay Digital Medical | Focus Media vs. Nanjing Medlander Medical | Focus Media vs. Cofoe Medical Technology | Focus Media vs. Allmed Medical Products |
| Hefei Metalforming vs. China Petroleum Chemical | Hefei Metalforming vs. PetroChina Co Ltd | Hefei Metalforming vs. China State Construction | Hefei Metalforming vs. China Railway Group |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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