Correlation Between Fiberhome Telecommunicatio and Hongrun Construction
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By analyzing existing cross correlation between Fiberhome Telecommunication Technologies and Hongrun Construction Group, you can compare the effects of market volatilities on Fiberhome Telecommunicatio and Hongrun 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 Hongrun Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiberhome Telecommunicatio and Hongrun Construction.
Diversification Opportunities for Fiberhome Telecommunicatio and Hongrun Construction
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fiberhome and Hongrun is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Fiberhome Telecommunication Te and Hongrun Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hongrun 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 Hongrun Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hongrun Construction has no effect on the direction of Fiberhome Telecommunicatio i.e., Fiberhome Telecommunicatio and Hongrun Construction go up and down completely randomly.
Pair Corralation between Fiberhome Telecommunicatio and Hongrun Construction
Assuming the 90 days trading horizon Fiberhome Telecommunicatio is expected to generate 1.47 times less return on investment than Hongrun Construction. In addition to that, Fiberhome Telecommunicatio is 1.02 times more volatile than Hongrun Construction Group. It trades about 0.14 of its total potential returns per unit of risk. Hongrun Construction Group is currently generating about 0.21 per unit of volatility. If you would invest 319.00 in Hongrun Construction Group on October 18, 2024 and sell it today you would earn a total of 192.00 from holding Hongrun Construction Group or generate 60.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fiberhome Telecommunication Te vs. Hongrun Construction Group
Performance |
| Timeline |
| Fiberhome Telecommunicatio |
| Hongrun Construction |
Fiberhome Telecommunicatio and Hongrun Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fiberhome Telecommunicatio and Hongrun Construction
The main advantage of trading using opposite Fiberhome Telecommunicatio and Hongrun Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiberhome Telecommunicatio position performs unexpectedly, Hongrun 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 Hongrun Construction will offset losses from the drop in Hongrun Construction's long position.The idea behind Fiberhome Telecommunication Technologies and Hongrun Construction 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.
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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