Correlation Between Fiberhome Telecommunicatio and Sihui Fuji
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By analyzing existing cross correlation between Fiberhome Telecommunication Technologies and Sihui Fuji Electronics, you can compare the effects of market volatilities on Fiberhome Telecommunicatio and Sihui Fuji 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 Sihui Fuji. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiberhome Telecommunicatio and Sihui Fuji.
Diversification Opportunities for Fiberhome Telecommunicatio and Sihui Fuji
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fiberhome and Sihui is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Fiberhome Telecommunication Te and Sihui Fuji Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sihui Fuji Electronics 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 Sihui Fuji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sihui Fuji Electronics has no effect on the direction of Fiberhome Telecommunicatio i.e., Fiberhome Telecommunicatio and Sihui Fuji go up and down completely randomly.
Pair Corralation between Fiberhome Telecommunicatio and Sihui Fuji
Assuming the 90 days trading horizon Fiberhome Telecommunicatio is expected to generate 2.36 times less return on investment than Sihui Fuji. But when comparing it to its historical volatility, Fiberhome Telecommunication Technologies is 1.15 times less risky than Sihui Fuji. It trades about 0.19 of its potential returns per unit of risk. Sihui Fuji Electronics is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 2,455 in Sihui Fuji Electronics on November 7, 2024 and sell it today you would earn a total of 630.00 from holding Sihui Fuji Electronics or generate 25.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fiberhome Telecommunication Te vs. Sihui Fuji Electronics
Performance |
| Timeline |
| Fiberhome Telecommunicatio |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sihui Fuji Electronics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Fiberhome Telecommunicatio and Sihui Fuji Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fiberhome Telecommunicatio and Sihui Fuji
The main advantage of trading using opposite Fiberhome Telecommunicatio and Sihui Fuji positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiberhome Telecommunicatio position performs unexpectedly, Sihui Fuji 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 Sihui Fuji will offset losses from the drop in Sihui Fuji's long position.The idea behind Fiberhome Telecommunication Technologies and Sihui Fuji Electronics 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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