Correlation Between Fiberhome Telecommunicatio and Zhejiang JIULI
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By analyzing existing cross correlation between Fiberhome Telecommunication Technologies and Zhejiang JIULI Hi tech, you can compare the effects of market volatilities on Fiberhome Telecommunicatio and Zhejiang JIULI 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 Zhejiang JIULI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiberhome Telecommunicatio and Zhejiang JIULI.
Diversification Opportunities for Fiberhome Telecommunicatio and Zhejiang JIULI
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fiberhome and Zhejiang is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Fiberhome Telecommunication Te and Zhejiang JIULI Hi tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang JIULI Hi 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 Zhejiang JIULI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang JIULI Hi has no effect on the direction of Fiberhome Telecommunicatio i.e., Fiberhome Telecommunicatio and Zhejiang JIULI go up and down completely randomly.
Pair Corralation between Fiberhome Telecommunicatio and Zhejiang JIULI
Assuming the 90 days trading horizon Fiberhome Telecommunication Technologies is expected to under-perform the Zhejiang JIULI. In addition to that, Fiberhome Telecommunicatio is 1.6 times more volatile than Zhejiang JIULI Hi tech. It trades about -0.04 of its total potential returns per unit of risk. Zhejiang JIULI Hi tech is currently generating about 0.04 per unit of volatility. If you would invest 2,327 in Zhejiang JIULI Hi tech on August 29, 2024 and sell it today you would earn a total of 25.00 from holding Zhejiang JIULI Hi tech or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fiberhome Telecommunication Te vs. Zhejiang JIULI Hi tech
Performance |
| Timeline |
| Fiberhome Telecommunicatio |
| Zhejiang JIULI Hi |
Fiberhome Telecommunicatio and Zhejiang JIULI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fiberhome Telecommunicatio and Zhejiang JIULI
The main advantage of trading using opposite Fiberhome Telecommunicatio and Zhejiang JIULI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiberhome Telecommunicatio position performs unexpectedly, Zhejiang JIULI 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 Zhejiang JIULI will offset losses from the drop in Zhejiang JIULI's long position.The idea behind Fiberhome Telecommunication Technologies and Zhejiang JIULI Hi tech 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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