Correlation Between Fiberhome Telecommunicatio and Sino-Platinum Metals

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Can any of the company-specific risk be diversified away by investing in both Fiberhome Telecommunicatio and Sino-Platinum Metals at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Fiberhome Telecommunicatio and Sino-Platinum Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fiberhome Telecommunication Technologies and Sino Platinum Metals Co, you can compare the effects of market volatilities on Fiberhome Telecommunicatio and Sino-Platinum Metals 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 Sino-Platinum Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiberhome Telecommunicatio and Sino-Platinum Metals.

Diversification Opportunities for Fiberhome Telecommunicatio and Sino-Platinum Metals

FiberhomeSino-PlatinumDiversified AwayFiberhomeSino-PlatinumDiversified Away100%
-0.01
  Correlation Coefficient

Good diversification

The 3 months correlation between Fiberhome and Sino-Platinum is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Fiberhome Telecommunication Te and Sino Platinum Metals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sino Platinum Metals 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 Sino-Platinum Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sino Platinum Metals has no effect on the direction of Fiberhome Telecommunicatio i.e., Fiberhome Telecommunicatio and Sino-Platinum Metals go up and down completely randomly.

Pair Corralation between Fiberhome Telecommunicatio and Sino-Platinum Metals

Assuming the 90 days trading horizon Fiberhome Telecommunication Technologies is expected to generate 3.75 times more return on investment than Sino-Platinum Metals. However, Fiberhome Telecommunicatio is 3.75 times more volatile than Sino Platinum Metals Co. It trades about 0.53 of its potential returns per unit of risk. Sino Platinum Metals Co is currently generating about -0.03 per unit of risk. If you would invest  1,920  in Fiberhome Telecommunication Technologies on November 21, 2024 and sell it today you would earn a total of  619.00  from holding Fiberhome Telecommunication Technologies or generate 32.24% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Fiberhome Telecommunication Te  vs.  Sino Platinum Metals Co

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-50510
JavaScript chart by amCharts 3.21.15600498 600459
       Timeline  
Fiberhome Telecommunicatio 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Fiberhome Telecommunication Technologies are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Fiberhome Telecommunicatio sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb182022242628
Sino Platinum Metals 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Sino Platinum Metals Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb13.213.413.613.81414.214.414.6

Fiberhome Telecommunicatio and Sino-Platinum Metals Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-9.54-7.14-4.75-2.35-0.03992.445.017.5810.1512.72 0.050.100.150.20
JavaScript chart by amCharts 3.21.15600498 600459
       Returns  

Pair Trading with Fiberhome Telecommunicatio and Sino-Platinum Metals

The main advantage of trading using opposite Fiberhome Telecommunicatio and Sino-Platinum Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiberhome Telecommunicatio position performs unexpectedly, Sino-Platinum Metals 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 Sino-Platinum Metals will offset losses from the drop in Sino-Platinum Metals' long position.
The idea behind Fiberhome Telecommunication Technologies and Sino Platinum Metals Co 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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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.

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