Correlation Between Hunan Mendale and Fiberhome Telecommunicatio
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By analyzing existing cross correlation between Hunan Mendale Hometextile and Fiberhome Telecommunication Technologies, you can compare the effects of market volatilities on Hunan Mendale 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 Hunan Mendale with a short position of Fiberhome Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunan Mendale and Fiberhome Telecommunicatio.
Diversification Opportunities for Hunan Mendale and Fiberhome Telecommunicatio
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hunan and Fiberhome is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Hunan Mendale Hometextile and Fiberhome Telecommunication Te in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiberhome Telecommunicatio and Hunan Mendale 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 Hunan Mendale Hometextile 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 Hunan Mendale i.e., Hunan Mendale and Fiberhome Telecommunicatio go up and down completely randomly.
Pair Corralation between Hunan Mendale and Fiberhome Telecommunicatio
Assuming the 90 days trading horizon Hunan Mendale Hometextile is expected to generate 1.5 times more return on investment than Fiberhome Telecommunicatio. However, Hunan Mendale is 1.5 times more volatile than Fiberhome Telecommunication Technologies. It trades about 0.28 of its potential returns per unit of risk. Fiberhome Telecommunication Technologies is currently generating about -0.25 per unit of risk. If you would invest 281.00 in Hunan Mendale Hometextile on September 12, 2024 and sell it today you would earn a total of 54.00 from holding Hunan Mendale Hometextile or generate 19.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hunan Mendale Hometextile vs. Fiberhome Telecommunication Te
Performance |
| Timeline |
| Hunan Mendale Hometextile |
| Fiberhome Telecommunicatio |
Hunan Mendale and Fiberhome Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hunan Mendale and Fiberhome Telecommunicatio
The main advantage of trading using opposite Hunan Mendale and Fiberhome Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunan Mendale 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.| Hunan Mendale vs. Lutian Machinery Co | Hunan Mendale vs. PetroChina Co Ltd | Hunan Mendale vs. Bank of China | Hunan Mendale vs. Gansu Jiu Steel |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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