Correlation Between SAIC and Fiberhome Telecommunicatio
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By analyzing existing cross correlation between SAIC Motor Corp and Fiberhome Telecommunication Technologies, you can compare the effects of market volatilities on SAIC 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 SAIC with a short position of Fiberhome Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAIC and Fiberhome Telecommunicatio.
Diversification Opportunities for SAIC and Fiberhome Telecommunicatio
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between SAIC and Fiberhome is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding SAIC Motor Corp and Fiberhome Telecommunication Te in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiberhome Telecommunicatio and SAIC 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 SAIC Motor Corp 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 SAIC i.e., SAIC and Fiberhome Telecommunicatio go up and down completely randomly.
Pair Corralation between SAIC and Fiberhome Telecommunicatio
Assuming the 90 days trading horizon SAIC is expected to generate 1.46 times less return on investment than Fiberhome Telecommunicatio. But when comparing it to its historical volatility, SAIC Motor Corp is 1.4 times less risky than Fiberhome Telecommunicatio. It trades about 0.03 of its potential returns per unit of risk. Fiberhome Telecommunication Technologies is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,576 in Fiberhome Telecommunication Technologies on November 8, 2024 and sell it today you would earn a total of 361.00 from holding Fiberhome Telecommunication Technologies or generate 22.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAIC Motor Corp vs. Fiberhome Telecommunication Te
Performance |
| Timeline |
| SAIC Motor Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Fiberhome Telecommunicatio |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SAIC and Fiberhome Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAIC and Fiberhome Telecommunicatio
The main advantage of trading using opposite SAIC and Fiberhome Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAIC 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 SAIC Motor Corp 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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