Correlation Between Fiberhome Telecommunicatio and SSAW Hotels
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By analyzing existing cross correlation between Fiberhome Telecommunication Technologies and SSAW Hotels Resorts, you can compare the effects of market volatilities on Fiberhome Telecommunicatio and SSAW Hotels 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 SSAW Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiberhome Telecommunicatio and SSAW Hotels.
Diversification Opportunities for Fiberhome Telecommunicatio and SSAW Hotels
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fiberhome and SSAW is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Fiberhome Telecommunication Te and SSAW Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSAW Hotels Resorts 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 SSAW Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSAW Hotels Resorts has no effect on the direction of Fiberhome Telecommunicatio i.e., Fiberhome Telecommunicatio and SSAW Hotels go up and down completely randomly.
Pair Corralation between Fiberhome Telecommunicatio and SSAW Hotels
Assuming the 90 days trading horizon Fiberhome Telecommunication Technologies is expected to generate 1.19 times more return on investment than SSAW Hotels. However, Fiberhome Telecommunicatio is 1.19 times more volatile than SSAW Hotels Resorts. It trades about 0.19 of its potential returns per unit of risk. SSAW Hotels Resorts is currently generating about 0.13 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fiberhome Telecommunication Te vs. SSAW Hotels Resorts
Performance |
| Timeline |
| Fiberhome Telecommunicatio |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SSAW Hotels Resorts |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fiberhome Telecommunicatio and SSAW Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fiberhome Telecommunicatio and SSAW Hotels
The main advantage of trading using opposite Fiberhome Telecommunicatio and SSAW Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiberhome Telecommunicatio position performs unexpectedly, SSAW Hotels 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 SSAW Hotels will offset losses from the drop in SSAW Hotels' long position.The idea behind Fiberhome Telecommunication Technologies and SSAW Hotels Resorts 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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