Correlation Between Fiberhome Telecommunicatio and CITIC Guoan
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By analyzing existing cross correlation between Fiberhome Telecommunication Technologies and CITIC Guoan Information, you can compare the effects of market volatilities on Fiberhome Telecommunicatio and CITIC Guoan 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 CITIC Guoan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiberhome Telecommunicatio and CITIC Guoan.
Diversification Opportunities for Fiberhome Telecommunicatio and CITIC Guoan
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fiberhome and CITIC is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Fiberhome Telecommunication Te and CITIC Guoan Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC Guoan Information 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 CITIC Guoan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC Guoan Information has no effect on the direction of Fiberhome Telecommunicatio i.e., Fiberhome Telecommunicatio and CITIC Guoan go up and down completely randomly.
Pair Corralation between Fiberhome Telecommunicatio and CITIC Guoan
Assuming the 90 days trading horizon Fiberhome Telecommunication Technologies is expected to generate 1.21 times more return on investment than CITIC Guoan. However, Fiberhome Telecommunicatio is 1.21 times more volatile than CITIC Guoan Information. It trades about -0.03 of its potential returns per unit of risk. CITIC Guoan Information is currently generating about -0.28 per unit of risk. If you would invest 1,989 in Fiberhome Telecommunication Technologies on October 20, 2024 and sell it today you would lose (70.00) from holding Fiberhome Telecommunication Technologies or give up 3.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fiberhome Telecommunication Te vs. CITIC Guoan Information
Performance |
| Timeline |
| Fiberhome Telecommunicatio |
| CITIC Guoan Information |
Fiberhome Telecommunicatio and CITIC Guoan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fiberhome Telecommunicatio and CITIC Guoan
The main advantage of trading using opposite Fiberhome Telecommunicatio and CITIC Guoan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiberhome Telecommunicatio position performs unexpectedly, CITIC Guoan 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 CITIC Guoan will offset losses from the drop in CITIC Guoan's long position.The idea behind Fiberhome Telecommunication Technologies and CITIC Guoan Information 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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