Correlation Between Fiberhome Telecommunicatio and Heilongjiang Transport
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By analyzing existing cross correlation between Fiberhome Telecommunication Technologies and Heilongjiang Transport Development, you can compare the effects of market volatilities on Fiberhome Telecommunicatio and Heilongjiang Transport 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 Heilongjiang Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiberhome Telecommunicatio and Heilongjiang Transport.
Diversification Opportunities for Fiberhome Telecommunicatio and Heilongjiang Transport
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fiberhome and Heilongjiang is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Fiberhome Telecommunication Te and Heilongjiang Transport Develop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heilongjiang Transport 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 Heilongjiang Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heilongjiang Transport has no effect on the direction of Fiberhome Telecommunicatio i.e., Fiberhome Telecommunicatio and Heilongjiang Transport go up and down completely randomly.
Pair Corralation between Fiberhome Telecommunicatio and Heilongjiang Transport
Assuming the 90 days trading horizon Fiberhome Telecommunicatio is expected to generate 1.06 times less return on investment than Heilongjiang Transport. But when comparing it to its historical volatility, Fiberhome Telecommunication Technologies is 1.13 times less risky than Heilongjiang Transport. It trades about 0.03 of its potential returns per unit of risk. Heilongjiang Transport Development is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 305.00 in Heilongjiang Transport Development on August 29, 2024 and sell it today you would earn a total of 77.00 from holding Heilongjiang Transport Development or generate 25.25% 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. Heilongjiang Transport Develop
Performance |
| Timeline |
| Fiberhome Telecommunicatio |
| Heilongjiang Transport |
Fiberhome Telecommunicatio and Heilongjiang Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fiberhome Telecommunicatio and Heilongjiang Transport
The main advantage of trading using opposite Fiberhome Telecommunicatio and Heilongjiang Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiberhome Telecommunicatio position performs unexpectedly, Heilongjiang Transport 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 Heilongjiang Transport will offset losses from the drop in Heilongjiang Transport's long position.The idea behind Fiberhome Telecommunication Technologies and Heilongjiang Transport Development 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.
| Heilongjiang Transport vs. Industrial and Commercial | Heilongjiang Transport vs. China Construction Bank | Heilongjiang Transport vs. Agricultural Bank of | Heilongjiang Transport vs. Bank of China |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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