Correlation Between Fiberhome Telecommunicatio and Hunan Investment
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By analyzing existing cross correlation between Fiberhome Telecommunication Technologies and Hunan Investment Group, you can compare the effects of market volatilities on Fiberhome Telecommunicatio and Hunan Investment 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 Fiberhome Telecommunicatio with a short position of Hunan Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiberhome Telecommunicatio and Hunan Investment.
Diversification Opportunities for Fiberhome Telecommunicatio and Hunan Investment
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fiberhome and Hunan is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Fiberhome Telecommunication Te and Hunan Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Investment and Fiberhome Telecommunicatio 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 Fiberhome Telecommunication Technologies are associated (or correlated) with Hunan Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Investment has no effect on the direction of Fiberhome Telecommunicatio i.e., Fiberhome Telecommunicatio and Hunan Investment go up and down completely randomly.
Pair Corralation between Fiberhome Telecommunicatio and Hunan Investment
Assuming the 90 days trading horizon Fiberhome Telecommunicatio is expected to generate 4.27 times less return on investment than Hunan Investment. In addition to that, Fiberhome Telecommunicatio is 1.09 times more volatile than Hunan Investment Group. It trades about 0.01 of its total potential returns per unit of risk. Hunan Investment Group is currently generating about 0.03 per unit of volatility. If you would invest 485.00 in Hunan Investment Group on August 26, 2024 and sell it today you would earn a total of 96.00 from holding Hunan Investment Group or generate 19.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fiberhome Telecommunication Te vs. Hunan Investment Group
Performance |
| Timeline |
| Fiberhome Telecommunicatio |
| Hunan Investment |
Fiberhome Telecommunicatio and Hunan Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fiberhome Telecommunicatio and Hunan Investment
The main advantage of trading using opposite Fiberhome Telecommunicatio and Hunan Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiberhome Telecommunicatio position performs unexpectedly, Hunan Investment 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 Hunan Investment will offset losses from the drop in Hunan Investment's long position.The idea behind Fiberhome Telecommunication Technologies and Hunan Investment Group 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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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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