Correlation Between Fibocom Wireless and Longjian Road
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By analyzing existing cross correlation between Fibocom Wireless and Longjian Road Bridge, you can compare the effects of market volatilities on Fibocom Wireless and Longjian Road 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 Longjian Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fibocom Wireless and Longjian Road.
Diversification Opportunities for Fibocom Wireless and Longjian Road
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fibocom and Longjian is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Fibocom Wireless and Longjian Road Bridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longjian Road Bridge 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 Longjian Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longjian Road Bridge has no effect on the direction of Fibocom Wireless i.e., Fibocom Wireless and Longjian Road go up and down completely randomly.
Pair Corralation between Fibocom Wireless and Longjian Road
Assuming the 90 days trading horizon Fibocom Wireless is expected to generate 1.46 times more return on investment than Longjian Road. However, Fibocom Wireless is 1.46 times more volatile than Longjian Road Bridge. It trades about 0.12 of its potential returns per unit of risk. Longjian Road Bridge is currently generating about -0.4 per unit of risk. If you would invest 1,834 in Fibocom Wireless on October 17, 2024 and sell it today you would earn a total of 187.00 from holding Fibocom Wireless or generate 10.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fibocom Wireless vs. Longjian Road Bridge
Performance |
| Timeline |
| Fibocom Wireless |
| Longjian Road Bridge |
Fibocom Wireless and Longjian Road Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fibocom Wireless and Longjian Road
The main advantage of trading using opposite Fibocom Wireless and Longjian Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fibocom Wireless position performs unexpectedly, Longjian Road 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 Longjian Road will offset losses from the drop in Longjian Road's long position.| Fibocom Wireless vs. Chongqing Brewery Co | Fibocom Wireless vs. Qingdao Foods Co | Fibocom Wireless vs. SSAW Hotels Resorts | Fibocom Wireless vs. Zhejiang Kingland Pipeline |
| Longjian Road vs. Runjian Communication Co | Longjian Road vs. Allied Machinery Co | Longjian Road vs. Fibocom Wireless | Longjian Road vs. Jiangsu Financial Leasing |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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