Correlation Between Hubei Forbon and Smartgiant Technology
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By analyzing existing cross correlation between Hubei Forbon Technology and Smartgiant Technology Co, you can compare the effects of market volatilities on Hubei Forbon and Smartgiant Technology 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 Hubei Forbon with a short position of Smartgiant Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Forbon and Smartgiant Technology.
Diversification Opportunities for Hubei Forbon and Smartgiant Technology
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hubei and Smartgiant is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Forbon Technology and Smartgiant Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smartgiant Technology and Hubei Forbon 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 Hubei Forbon Technology are associated (or correlated) with Smartgiant Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smartgiant Technology has no effect on the direction of Hubei Forbon i.e., Hubei Forbon and Smartgiant Technology go up and down completely randomly.
Pair Corralation between Hubei Forbon and Smartgiant Technology
Assuming the 90 days trading horizon Hubei Forbon is expected to generate 2.07 times less return on investment than Smartgiant Technology. But when comparing it to its historical volatility, Hubei Forbon Technology is 1.55 times less risky than Smartgiant Technology. It trades about 0.1 of its potential returns per unit of risk. Smartgiant Technology Co is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,006 in Smartgiant Technology Co on November 7, 2024 and sell it today you would earn a total of 1,840 from holding Smartgiant Technology Co or generate 91.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubei Forbon Technology vs. Smartgiant Technology Co
Performance |
| Timeline |
| Hubei Forbon Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Smartgiant Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hubei Forbon and Smartgiant Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Forbon and Smartgiant Technology
The main advantage of trading using opposite Hubei Forbon and Smartgiant Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Forbon position performs unexpectedly, Smartgiant Technology 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 Smartgiant Technology will offset losses from the drop in Smartgiant Technology's long position.The idea behind Hubei Forbon Technology and Smartgiant Technology Co 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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