Correlation Between Fiberhome Telecommunicatio and Shenzhen Inovance
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By analyzing existing cross correlation between Fiberhome Telecommunication Technologies and Shenzhen Inovance Tech, you can compare the effects of market volatilities on Fiberhome Telecommunicatio and Shenzhen Inovance 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 Shenzhen Inovance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiberhome Telecommunicatio and Shenzhen Inovance.
Diversification Opportunities for Fiberhome Telecommunicatio and Shenzhen Inovance
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fiberhome and Shenzhen is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Fiberhome Telecommunication Te and Shenzhen Inovance Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Inovance Tech 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 Shenzhen Inovance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Inovance Tech has no effect on the direction of Fiberhome Telecommunicatio i.e., Fiberhome Telecommunicatio and Shenzhen Inovance go up and down completely randomly.
Pair Corralation between Fiberhome Telecommunicatio and Shenzhen Inovance
Assuming the 90 days trading horizon Fiberhome Telecommunication Technologies is expected to generate 1.21 times more return on investment than Shenzhen Inovance. However, Fiberhome Telecommunicatio is 1.21 times more volatile than Shenzhen Inovance Tech. It trades about 0.19 of its potential returns per unit of risk. Shenzhen Inovance Tech is currently generating about 0.19 per unit of risk. If you would invest 1,721 in Fiberhome Telecommunication Technologies on November 7, 2024 and sell it today you would earn a total of 169.00 from holding Fiberhome Telecommunication Technologies or generate 9.82% 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. Shenzhen Inovance Tech
Performance |
| Timeline |
| Fiberhome Telecommunicatio |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Shenzhen Inovance Tech |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fiberhome Telecommunicatio and Shenzhen Inovance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fiberhome Telecommunicatio and Shenzhen Inovance
The main advantage of trading using opposite Fiberhome Telecommunicatio and Shenzhen Inovance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiberhome Telecommunicatio position performs unexpectedly, Shenzhen Inovance 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 Shenzhen Inovance will offset losses from the drop in Shenzhen Inovance's long position.The idea behind Fiberhome Telecommunication Technologies and Shenzhen Inovance 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.| Shenzhen Inovance vs. Shanghai SK Automation | Shenzhen Inovance vs. Chongqing Mas SciTech | Shenzhen Inovance vs. Zhejiang Jiecang Linear | Shenzhen Inovance vs. Zhejiang Kaishan Compressor |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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