Correlation Between Huafa Industrial and Fiberhome Telecommunicatio
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By analyzing existing cross correlation between Huafa Industrial Co and Fiberhome Telecommunication Technologies, you can compare the effects of market volatilities on Huafa Industrial 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 Huafa Industrial with a short position of Fiberhome Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huafa Industrial and Fiberhome Telecommunicatio.
Diversification Opportunities for Huafa Industrial and Fiberhome Telecommunicatio
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Huafa and Fiberhome is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Huafa Industrial Co and Fiberhome Telecommunication Te in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiberhome Telecommunicatio and Huafa Industrial 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 Huafa Industrial Co 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 Huafa Industrial i.e., Huafa Industrial and Fiberhome Telecommunicatio go up and down completely randomly.
Pair Corralation between Huafa Industrial and Fiberhome Telecommunicatio
Assuming the 90 days trading horizon Huafa Industrial Co is expected to under-perform the Fiberhome Telecommunicatio. But the stock apears to be less risky and, when comparing its historical volatility, Huafa Industrial Co is 1.14 times less risky than Fiberhome Telecommunicatio. The stock trades about -0.04 of its potential returns per unit of risk. The Fiberhome Telecommunication Technologies is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,706 in Fiberhome Telecommunication Technologies on November 27, 2024 and sell it today you would earn a total of 1,091 from holding Fiberhome Telecommunication Technologies or generate 63.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huafa Industrial Co vs. Fiberhome Telecommunication Te
Performance |
| Timeline |
| Huafa Industrial |
| Fiberhome Telecommunicatio |
Huafa Industrial and Fiberhome Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huafa Industrial and Fiberhome Telecommunicatio
The main advantage of trading using opposite Huafa Industrial and Fiberhome Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huafa Industrial 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.| Huafa Industrial vs. China World Trade | Huafa Industrial vs. GRIPM Advanced Materials | Huafa Industrial vs. Hangzhou Minsheng Healthcare | Huafa Industrial vs. China Reform Health |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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