Correlation Between Fiberhome Telecommunicatio and Leyard Optoelectronic
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By analyzing existing cross correlation between Fiberhome Telecommunication Technologies and Leyard Optoelectronic, you can compare the effects of market volatilities on Fiberhome Telecommunicatio and Leyard Optoelectronic 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 Leyard Optoelectronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiberhome Telecommunicatio and Leyard Optoelectronic.
Diversification Opportunities for Fiberhome Telecommunicatio and Leyard Optoelectronic
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fiberhome and Leyard is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Fiberhome Telecommunication Te and Leyard Optoelectronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leyard Optoelectronic 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 Leyard Optoelectronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leyard Optoelectronic has no effect on the direction of Fiberhome Telecommunicatio i.e., Fiberhome Telecommunicatio and Leyard Optoelectronic go up and down completely randomly.
Pair Corralation between Fiberhome Telecommunicatio and Leyard Optoelectronic
Assuming the 90 days trading horizon Fiberhome Telecommunicatio is expected to generate 2.6 times less return on investment than Leyard Optoelectronic. But when comparing it to its historical volatility, Fiberhome Telecommunication Technologies is 1.54 times less risky than Leyard Optoelectronic. It trades about 0.03 of its potential returns per unit of risk. Leyard Optoelectronic is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 462.00 in Leyard Optoelectronic on October 12, 2024 and sell it today you would earn a total of 143.00 from holding Leyard Optoelectronic or generate 30.95% 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. Leyard Optoelectronic
Performance |
| Timeline |
| Fiberhome Telecommunicatio |
| Leyard Optoelectronic |
Fiberhome Telecommunicatio and Leyard Optoelectronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fiberhome Telecommunicatio and Leyard Optoelectronic
The main advantage of trading using opposite Fiberhome Telecommunicatio and Leyard Optoelectronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiberhome Telecommunicatio position performs unexpectedly, Leyard Optoelectronic 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 Leyard Optoelectronic will offset losses from the drop in Leyard Optoelectronic's long position.The idea behind Fiberhome Telecommunication Technologies and Leyard Optoelectronic 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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