Correlation Between Fiberhome Telecommunicatio and Yindu Kitchen
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By analyzing existing cross correlation between Fiberhome Telecommunication Technologies and Yindu Kitchen Equipment, you can compare the effects of market volatilities on Fiberhome Telecommunicatio and Yindu Kitchen 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 Yindu Kitchen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiberhome Telecommunicatio and Yindu Kitchen.
Diversification Opportunities for Fiberhome Telecommunicatio and Yindu Kitchen
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fiberhome and Yindu is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Fiberhome Telecommunication Te and Yindu Kitchen Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yindu Kitchen Equipment 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 Yindu Kitchen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yindu Kitchen Equipment has no effect on the direction of Fiberhome Telecommunicatio i.e., Fiberhome Telecommunicatio and Yindu Kitchen go up and down completely randomly.
Pair Corralation between Fiberhome Telecommunicatio and Yindu Kitchen
Assuming the 90 days trading horizon Fiberhome Telecommunicatio is expected to generate 1.02 times less return on investment than Yindu Kitchen. In addition to that, Fiberhome Telecommunicatio is 1.3 times more volatile than Yindu Kitchen Equipment. It trades about 0.04 of its total potential returns per unit of risk. Yindu Kitchen Equipment is currently generating about 0.05 per unit of volatility. If you would invest 1,649 in Yindu Kitchen Equipment on October 16, 2024 and sell it today you would earn a total of 814.00 from holding Yindu Kitchen Equipment or generate 49.36% 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. Yindu Kitchen Equipment
Performance |
| Timeline |
| Fiberhome Telecommunicatio |
| Yindu Kitchen Equipment |
Fiberhome Telecommunicatio and Yindu Kitchen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fiberhome Telecommunicatio and Yindu Kitchen
The main advantage of trading using opposite Fiberhome Telecommunicatio and Yindu Kitchen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiberhome Telecommunicatio position performs unexpectedly, Yindu Kitchen 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 Yindu Kitchen will offset losses from the drop in Yindu Kitchen's long position.The idea behind Fiberhome Telecommunication Technologies and Yindu Kitchen Equipment 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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