Correlation Between Fiberhome Telecommunicatio and State Grid
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By analyzing existing cross correlation between Fiberhome Telecommunication Technologies and State Grid InformationCommunication, you can compare the effects of market volatilities on Fiberhome Telecommunicatio and State Grid 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 State Grid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiberhome Telecommunicatio and State Grid.
Diversification Opportunities for Fiberhome Telecommunicatio and State Grid
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fiberhome and State is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Fiberhome Telecommunication Te and State Grid InformationCommunic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Grid Informati 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 State Grid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Grid Informati has no effect on the direction of Fiberhome Telecommunicatio i.e., Fiberhome Telecommunicatio and State Grid go up and down completely randomly.
Pair Corralation between Fiberhome Telecommunicatio and State Grid
Assuming the 90 days trading horizon Fiberhome Telecommunication Technologies is expected to under-perform the State Grid. But the stock apears to be less risky and, when comparing its historical volatility, Fiberhome Telecommunication Technologies is 1.37 times less risky than State Grid. The stock trades about -0.02 of its potential returns per unit of risk. The State Grid InformationCommunication is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,976 in State Grid InformationCommunication on August 30, 2024 and sell it today you would earn a total of 104.00 from holding State Grid InformationCommunication or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fiberhome Telecommunication Te vs. State Grid InformationCommunic
Performance |
| Timeline |
| Fiberhome Telecommunicatio |
| State Grid Informati |
Fiberhome Telecommunicatio and State Grid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fiberhome Telecommunicatio and State Grid
The main advantage of trading using opposite Fiberhome Telecommunicatio and State Grid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiberhome Telecommunicatio position performs unexpectedly, State Grid 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 State Grid will offset losses from the drop in State Grid's long position.The idea behind Fiberhome Telecommunication Technologies and State Grid InformationCommunication 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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