Correlation Between Fiberhome Telecommunicatio and Zotye Automobile
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By analyzing existing cross correlation between Fiberhome Telecommunication Technologies and Zotye Automobile Co, you can compare the effects of market volatilities on Fiberhome Telecommunicatio and Zotye Automobile 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 Zotye Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiberhome Telecommunicatio and Zotye Automobile.
Diversification Opportunities for Fiberhome Telecommunicatio and Zotye Automobile
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fiberhome and Zotye is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Fiberhome Telecommunication Te and Zotye Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zotye Automobile 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 Zotye Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zotye Automobile has no effect on the direction of Fiberhome Telecommunicatio i.e., Fiberhome Telecommunicatio and Zotye Automobile go up and down completely randomly.
Pair Corralation between Fiberhome Telecommunicatio and Zotye Automobile
Assuming the 90 days trading horizon Fiberhome Telecommunication Technologies is expected to under-perform the Zotye Automobile. But the stock apears to be less risky and, when comparing its historical volatility, Fiberhome Telecommunication Technologies is 2.03 times less risky than Zotye Automobile. The stock trades about -0.02 of its potential returns per unit of risk. The Zotye Automobile Co is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 216.00 in Zotye Automobile Co on August 25, 2024 and sell it today you would earn a total of 41.00 from holding Zotye Automobile Co or generate 18.98% 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. Zotye Automobile Co
Performance |
| Timeline |
| Fiberhome Telecommunicatio |
| Zotye Automobile |
Fiberhome Telecommunicatio and Zotye Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fiberhome Telecommunicatio and Zotye Automobile
The main advantage of trading using opposite Fiberhome Telecommunicatio and Zotye Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiberhome Telecommunicatio position performs unexpectedly, Zotye Automobile 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 Zotye Automobile will offset losses from the drop in Zotye Automobile's long position.The idea behind Fiberhome Telecommunication Technologies and Zotye Automobile Co 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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