Correlation Between Fiberhome Telecommunicatio and China Everbright
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By analyzing existing cross correlation between Fiberhome Telecommunication Technologies and China Everbright Bank, you can compare the effects of market volatilities on Fiberhome Telecommunicatio and China Everbright 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 China Everbright. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiberhome Telecommunicatio and China Everbright.
Diversification Opportunities for Fiberhome Telecommunicatio and China Everbright
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fiberhome and China is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Fiberhome Telecommunication Te and China Everbright Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Everbright Bank 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 China Everbright. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Everbright Bank has no effect on the direction of Fiberhome Telecommunicatio i.e., Fiberhome Telecommunicatio and China Everbright go up and down completely randomly.
Pair Corralation between Fiberhome Telecommunicatio and China Everbright
Assuming the 90 days trading horizon Fiberhome Telecommunication Technologies is expected to generate 1.57 times more return on investment than China Everbright. However, Fiberhome Telecommunicatio is 1.57 times more volatile than China Everbright Bank. It trades about 0.06 of its potential returns per unit of risk. China Everbright Bank is currently generating about 0.08 per unit of risk. If you would invest 1,593 in Fiberhome Telecommunication Technologies on October 30, 2024 and sell it today you would earn a total of 297.00 from holding Fiberhome Telecommunication Technologies or generate 18.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fiberhome Telecommunication Te vs. China Everbright Bank
Performance |
| Timeline |
| Fiberhome Telecommunicatio |
| China Everbright Bank |
Fiberhome Telecommunicatio and China Everbright Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fiberhome Telecommunicatio and China Everbright
The main advantage of trading using opposite Fiberhome Telecommunicatio and China Everbright positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiberhome Telecommunicatio position performs unexpectedly, China Everbright 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 China Everbright will offset losses from the drop in China Everbright's long position.The idea behind Fiberhome Telecommunication Technologies and China Everbright Bank 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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