Correlation Between Fiberhome Telecommunicatio and Shantui Construction
Specify exactly 2 symbols:
By analyzing existing cross correlation between Fiberhome Telecommunication Technologies and Shantui Construction Machinery, you can compare the effects of market volatilities on Fiberhome Telecommunicatio and Shantui Construction 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 Shantui Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiberhome Telecommunicatio and Shantui Construction.
Diversification Opportunities for Fiberhome Telecommunicatio and Shantui Construction
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fiberhome and Shantui is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Fiberhome Telecommunication Te and Shantui Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shantui Construction 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 Shantui Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shantui Construction has no effect on the direction of Fiberhome Telecommunicatio i.e., Fiberhome Telecommunicatio and Shantui Construction go up and down completely randomly.
Pair Corralation between Fiberhome Telecommunicatio and Shantui Construction
Assuming the 90 days trading horizon Fiberhome Telecommunicatio is expected to generate 2.08 times less return on investment than Shantui Construction. But when comparing it to its historical volatility, Fiberhome Telecommunication Technologies is 1.14 times less risky than Shantui Construction. It trades about 0.06 of its potential returns per unit of risk. Shantui Construction Machinery is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 451.00 in Shantui Construction Machinery on October 18, 2024 and sell it today you would earn a total of 540.00 from holding Shantui Construction Machinery or generate 119.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fiberhome Telecommunication Te vs. Shantui Construction Machinery
Performance |
| Timeline |
| Fiberhome Telecommunicatio |
| Shantui Construction |
Fiberhome Telecommunicatio and Shantui Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fiberhome Telecommunicatio and Shantui Construction
The main advantage of trading using opposite Fiberhome Telecommunicatio and Shantui Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiberhome Telecommunicatio position performs unexpectedly, Shantui Construction 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 Shantui Construction will offset losses from the drop in Shantui Construction's long position.The idea behind Fiberhome Telecommunication Technologies and Shantui Construction Machinery 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |