Correlation Between Fiberhome Telecommunicatio and Beijing Mainstreets
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By analyzing existing cross correlation between Fiberhome Telecommunication Technologies and Beijing Mainstreets Investment, you can compare the effects of market volatilities on Fiberhome Telecommunicatio and Beijing Mainstreets 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 Beijing Mainstreets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiberhome Telecommunicatio and Beijing Mainstreets.
Diversification Opportunities for Fiberhome Telecommunicatio and Beijing Mainstreets
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fiberhome and Beijing is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Fiberhome Telecommunication Te and Beijing Mainstreets Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Mainstreets 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 Beijing Mainstreets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Mainstreets has no effect on the direction of Fiberhome Telecommunicatio i.e., Fiberhome Telecommunicatio and Beijing Mainstreets go up and down completely randomly.
Pair Corralation between Fiberhome Telecommunicatio and Beijing Mainstreets
Assuming the 90 days trading horizon Fiberhome Telecommunication Technologies is expected to generate 1.09 times more return on investment than Beijing Mainstreets. However, Fiberhome Telecommunicatio is 1.09 times more volatile than Beijing Mainstreets Investment. It trades about 0.18 of its potential returns per unit of risk. Beijing Mainstreets Investment is currently generating about 0.18 per unit of risk. If you would invest 1,841 in Fiberhome Telecommunication Technologies on November 8, 2024 and sell it today you would earn a total of 153.00 from holding Fiberhome Telecommunication Technologies or generate 8.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fiberhome Telecommunication Te vs. Beijing Mainstreets Investment
Performance |
| Timeline |
| Fiberhome Telecommunicatio |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Beijing Mainstreets |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Fiberhome Telecommunicatio and Beijing Mainstreets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fiberhome Telecommunicatio and Beijing Mainstreets
The main advantage of trading using opposite Fiberhome Telecommunicatio and Beijing Mainstreets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiberhome Telecommunicatio position performs unexpectedly, Beijing Mainstreets 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 Beijing Mainstreets will offset losses from the drop in Beijing Mainstreets' long position.The idea behind Fiberhome Telecommunication Technologies and Beijing Mainstreets Investment 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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