Correlation Between Shenzhen Inovance and Fiberhome Telecommunicatio
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By analyzing existing cross correlation between Shenzhen Inovance Tech and Fiberhome Telecommunication Technologies, you can compare the effects of market volatilities on Shenzhen Inovance 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 Shenzhen Inovance with a short position of Fiberhome Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Inovance and Fiberhome Telecommunicatio.
Diversification Opportunities for Shenzhen Inovance and Fiberhome Telecommunicatio
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shenzhen and Fiberhome is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Inovance Tech and Fiberhome Telecommunication Te in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiberhome Telecommunicatio and Shenzhen Inovance 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 Shenzhen Inovance Tech 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 Shenzhen Inovance i.e., Shenzhen Inovance and Fiberhome Telecommunicatio go up and down completely randomly.
Pair Corralation between Shenzhen Inovance and Fiberhome Telecommunicatio
Assuming the 90 days trading horizon Shenzhen Inovance Tech is expected to generate 0.89 times more return on investment than Fiberhome Telecommunicatio. However, Shenzhen Inovance Tech is 1.13 times less risky than Fiberhome Telecommunicatio. It trades about 0.27 of its potential returns per unit of risk. Fiberhome Telecommunication Technologies is currently generating about 0.24 per unit of risk. If you would invest 5,576 in Shenzhen Inovance Tech on November 7, 2024 and sell it today you would earn a total of 734.00 from holding Shenzhen Inovance Tech or generate 13.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Inovance Tech vs. Fiberhome Telecommunication Te
Performance |
| Timeline |
| Shenzhen Inovance Tech |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Fiberhome Telecommunicatio |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Shenzhen Inovance and Fiberhome Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Inovance and Fiberhome Telecommunicatio
The main advantage of trading using opposite Shenzhen Inovance and Fiberhome Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Inovance 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.The idea behind Shenzhen Inovance Tech and Fiberhome Telecommunication Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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