Correlation Between Fibocom Wireless and Shenzhen Noposion

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Can any of the company-specific risk be diversified away by investing in both Fibocom Wireless and Shenzhen Noposion at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Fibocom Wireless and Shenzhen Noposion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fibocom Wireless and Shenzhen Noposion Agrochemicals, you can compare the effects of market volatilities on Fibocom Wireless and Shenzhen Noposion 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 Fibocom Wireless with a short position of Shenzhen Noposion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fibocom Wireless and Shenzhen Noposion.

Diversification Opportunities for Fibocom Wireless and Shenzhen Noposion

FibocomShenzhenDiversified AwayFibocomShenzhenDiversified Away100%
0.32
  Correlation Coefficient

Weak diversification

The 3 months correlation between Fibocom and Shenzhen is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Fibocom Wireless and Shenzhen Noposion Agrochemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Noposion and Fibocom Wireless 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 Fibocom Wireless are associated (or correlated) with Shenzhen Noposion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Noposion has no effect on the direction of Fibocom Wireless i.e., Fibocom Wireless and Shenzhen Noposion go up and down completely randomly.

Pair Corralation between Fibocom Wireless and Shenzhen Noposion

Assuming the 90 days trading horizon Fibocom Wireless is expected to generate 1.46 times more return on investment than Shenzhen Noposion. However, Fibocom Wireless is 1.46 times more volatile than Shenzhen Noposion Agrochemicals. It trades about 0.05 of its potential returns per unit of risk. Shenzhen Noposion Agrochemicals is currently generating about 0.05 per unit of risk. If you would invest  1,746  in Fibocom Wireless on October 31, 2024 and sell it today you would earn a total of  1,266  from holding Fibocom Wireless or generate 72.51% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Fibocom Wireless  vs.  Shenzhen Noposion Agrochemical

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 010203040
JavaScript chart by amCharts 3.21.15300638 002215
       Timeline  
Fibocom Wireless 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Fibocom Wireless are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Fibocom Wireless sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanJan202530
Shenzhen Noposion 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Shenzhen Noposion Agrochemicals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shenzhen Noposion may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanJan99.51010.51111.512

Fibocom Wireless and Shenzhen Noposion Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-15.21-11.39-7.57-3.750.07054.168.3912.6216.85 0.010.020.030.04
JavaScript chart by amCharts 3.21.15300638 002215
       Returns  

Pair Trading with Fibocom Wireless and Shenzhen Noposion

The main advantage of trading using opposite Fibocom Wireless and Shenzhen Noposion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fibocom Wireless position performs unexpectedly, Shenzhen Noposion 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 Shenzhen Noposion will offset losses from the drop in Shenzhen Noposion's long position.
The idea behind Fibocom Wireless and Shenzhen Noposion Agrochemicals 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.
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.

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