Correlation Between Fiberhome Telecommunicatio and Chinese Universe
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By analyzing existing cross correlation between Fiberhome Telecommunication Technologies and Chinese Universe Publishing, you can compare the effects of market volatilities on Fiberhome Telecommunicatio and Chinese Universe 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 Chinese Universe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiberhome Telecommunicatio and Chinese Universe.
Diversification Opportunities for Fiberhome Telecommunicatio and Chinese Universe
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fiberhome and Chinese is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Fiberhome Telecommunication Te and Chinese Universe Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chinese Universe Pub 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 Chinese Universe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chinese Universe Pub has no effect on the direction of Fiberhome Telecommunicatio i.e., Fiberhome Telecommunicatio and Chinese Universe go up and down completely randomly.
Pair Corralation between Fiberhome Telecommunicatio and Chinese Universe
Assuming the 90 days trading horizon Fiberhome Telecommunicatio is expected to generate 1.68 times less return on investment than Chinese Universe. But when comparing it to its historical volatility, Fiberhome Telecommunication Technologies is 1.06 times less risky than Chinese Universe. It trades about 0.01 of its potential returns per unit of risk. Chinese Universe Publishing is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,182 in Chinese Universe Publishing on August 25, 2024 and sell it today you would earn a total of 61.00 from holding Chinese Universe Publishing or generate 5.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fiberhome Telecommunication Te vs. Chinese Universe Publishing
Performance |
| Timeline |
| Fiberhome Telecommunicatio |
| Chinese Universe Pub |
Fiberhome Telecommunicatio and Chinese Universe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fiberhome Telecommunicatio and Chinese Universe
The main advantage of trading using opposite Fiberhome Telecommunicatio and Chinese Universe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiberhome Telecommunicatio position performs unexpectedly, Chinese Universe 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 Chinese Universe will offset losses from the drop in Chinese Universe's long position.The idea behind Fiberhome Telecommunication Technologies and Chinese Universe Publishing 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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