Correlation Between Fiberhome Telecommunicatio and CSSC Offshore
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By analyzing existing cross correlation between Fiberhome Telecommunication Technologies and CSSC Offshore Marine, you can compare the effects of market volatilities on Fiberhome Telecommunicatio and CSSC Offshore 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 CSSC Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiberhome Telecommunicatio and CSSC Offshore.
Diversification Opportunities for Fiberhome Telecommunicatio and CSSC Offshore
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fiberhome and CSSC is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Fiberhome Telecommunication Te and CSSC Offshore Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSSC Offshore Marine 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 CSSC Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSSC Offshore Marine has no effect on the direction of Fiberhome Telecommunicatio i.e., Fiberhome Telecommunicatio and CSSC Offshore go up and down completely randomly.
Pair Corralation between Fiberhome Telecommunicatio and CSSC Offshore
Assuming the 90 days trading horizon Fiberhome Telecommunicatio is expected to generate 1.57 times less return on investment than CSSC Offshore. In addition to that, Fiberhome Telecommunicatio is 1.19 times more volatile than CSSC Offshore Marine. It trades about 0.01 of its total potential returns per unit of risk. CSSC Offshore Marine is currently generating about 0.02 per unit of volatility. If you would invest 2,272 in CSSC Offshore Marine on August 25, 2024 and sell it today you would earn a total of 189.00 from holding CSSC Offshore Marine or generate 8.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fiberhome Telecommunication Te vs. CSSC Offshore Marine
Performance |
| Timeline |
| Fiberhome Telecommunicatio |
| CSSC Offshore Marine |
Fiberhome Telecommunicatio and CSSC Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fiberhome Telecommunicatio and CSSC Offshore
The main advantage of trading using opposite Fiberhome Telecommunicatio and CSSC Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiberhome Telecommunicatio position performs unexpectedly, CSSC Offshore 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 CSSC Offshore will offset losses from the drop in CSSC Offshore's long position.The idea behind Fiberhome Telecommunication Technologies and CSSC Offshore Marine 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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