Correlation Between Fiberhome Telecommunicatio and Eastroc Beverage
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By analyzing existing cross correlation between Fiberhome Telecommunication Technologies and Eastroc Beverage Group, you can compare the effects of market volatilities on Fiberhome Telecommunicatio and Eastroc Beverage 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 Eastroc Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiberhome Telecommunicatio and Eastroc Beverage.
Diversification Opportunities for Fiberhome Telecommunicatio and Eastroc Beverage
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fiberhome and Eastroc is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Fiberhome Telecommunication Te and Eastroc Beverage Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastroc Beverage 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 Eastroc Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastroc Beverage has no effect on the direction of Fiberhome Telecommunicatio i.e., Fiberhome Telecommunicatio and Eastroc Beverage go up and down completely randomly.
Pair Corralation between Fiberhome Telecommunicatio and Eastroc Beverage
Assuming the 90 days trading horizon Fiberhome Telecommunicatio is expected to generate 5.6 times less return on investment than Eastroc Beverage. In addition to that, Fiberhome Telecommunicatio is 2.15 times more volatile than Eastroc Beverage Group. It trades about 0.03 of its total potential returns per unit of risk. Eastroc Beverage Group is currently generating about 0.36 per unit of volatility. If you would invest 24,250 in Eastroc Beverage Group on October 12, 2024 and sell it today you would earn a total of 2,890 from holding Eastroc Beverage Group or generate 11.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fiberhome Telecommunication Te vs. Eastroc Beverage Group
Performance |
| Timeline |
| Fiberhome Telecommunicatio |
| Eastroc Beverage |
Fiberhome Telecommunicatio and Eastroc Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fiberhome Telecommunicatio and Eastroc Beverage
The main advantage of trading using opposite Fiberhome Telecommunicatio and Eastroc Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiberhome Telecommunicatio position performs unexpectedly, Eastroc Beverage 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 Eastroc Beverage will offset losses from the drop in Eastroc Beverage's long position.The idea behind Fiberhome Telecommunication Technologies and Eastroc Beverage Group 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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