Correlation Between Fiberhome Telecommunicatio and Yunnan Jianzhijia
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By analyzing existing cross correlation between Fiberhome Telecommunication Technologies and Yunnan Jianzhijia Health Chain, you can compare the effects of market volatilities on Fiberhome Telecommunicatio and Yunnan Jianzhijia 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 Yunnan Jianzhijia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiberhome Telecommunicatio and Yunnan Jianzhijia.
Diversification Opportunities for Fiberhome Telecommunicatio and Yunnan Jianzhijia
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fiberhome and Yunnan is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Fiberhome Telecommunication Te and Yunnan Jianzhijia Health Chain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yunnan Jianzhijia 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 Yunnan Jianzhijia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yunnan Jianzhijia has no effect on the direction of Fiberhome Telecommunicatio i.e., Fiberhome Telecommunicatio and Yunnan Jianzhijia go up and down completely randomly.
Pair Corralation between Fiberhome Telecommunicatio and Yunnan Jianzhijia
Assuming the 90 days trading horizon Fiberhome Telecommunication Technologies is expected to generate 1.99 times more return on investment than Yunnan Jianzhijia. However, Fiberhome Telecommunicatio is 1.99 times more volatile than Yunnan Jianzhijia Health Chain. It trades about 0.32 of its potential returns per unit of risk. Yunnan Jianzhijia Health Chain is currently generating about -0.13 per unit of risk. If you would invest 1,937 in Fiberhome Telecommunication Technologies on December 1, 2024 and sell it today you would earn a total of 513.00 from holding Fiberhome Telecommunication Technologies or generate 26.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fiberhome Telecommunication Te vs. Yunnan Jianzhijia Health Chain
Performance |
| Timeline |
| Fiberhome Telecommunicatio |
| Yunnan Jianzhijia |
Fiberhome Telecommunicatio and Yunnan Jianzhijia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fiberhome Telecommunicatio and Yunnan Jianzhijia
The main advantage of trading using opposite Fiberhome Telecommunicatio and Yunnan Jianzhijia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiberhome Telecommunicatio position performs unexpectedly, Yunnan Jianzhijia 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 Yunnan Jianzhijia will offset losses from the drop in Yunnan Jianzhijia's long position.The idea behind Fiberhome Telecommunication Technologies and Yunnan Jianzhijia Health Chain 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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