Correlation Between Guangdong Shenglu and Fiberhome Telecommunicatio
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By analyzing existing cross correlation between Guangdong Shenglu Telecommunication and Fiberhome Telecommunication Technologies, you can compare the effects of market volatilities on Guangdong Shenglu 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 Guangdong Shenglu with a short position of Fiberhome Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Shenglu and Fiberhome Telecommunicatio.
Diversification Opportunities for Guangdong Shenglu and Fiberhome Telecommunicatio
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guangdong and Fiberhome is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Shenglu Telecommunic and Fiberhome Telecommunication Te in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiberhome Telecommunicatio and Guangdong Shenglu 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 Guangdong Shenglu Telecommunication 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 Guangdong Shenglu i.e., Guangdong Shenglu and Fiberhome Telecommunicatio go up and down completely randomly.
Pair Corralation between Guangdong Shenglu and Fiberhome Telecommunicatio
Assuming the 90 days trading horizon Guangdong Shenglu Telecommunication is expected to generate 1.14 times more return on investment than Fiberhome Telecommunicatio. However, Guangdong Shenglu is 1.14 times more volatile than Fiberhome Telecommunication Technologies. It trades about -0.01 of its potential returns per unit of risk. Fiberhome Telecommunication Technologies is currently generating about -0.04 per unit of risk. If you would invest 724.00 in Guangdong Shenglu Telecommunication on August 29, 2024 and sell it today you would lose (12.00) from holding Guangdong Shenglu Telecommunication or give up 1.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Shenglu Telecommunic vs. Fiberhome Telecommunication Te
Performance |
| Timeline |
| Guangdong Shenglu |
| Fiberhome Telecommunicatio |
Guangdong Shenglu and Fiberhome Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Shenglu and Fiberhome Telecommunicatio
The main advantage of trading using opposite Guangdong Shenglu and Fiberhome Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Shenglu 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.| Guangdong Shenglu vs. Shenzhen MYS Environmental | Guangdong Shenglu vs. AVIC Fund Management | Guangdong Shenglu vs. Shenzhen Bingchuan Network | Guangdong Shenglu vs. Penghua Shenzhen Energy |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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