Correlation Between Zhongtong Guomai and Fiberhome Telecommunicatio
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By analyzing existing cross correlation between Zhongtong Guomai Communication and Fiberhome Telecommunication Technologies, you can compare the effects of market volatilities on Zhongtong Guomai and Fiberhome Telecommunicatio 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 Zhongtong Guomai with a short position of Fiberhome Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongtong Guomai and Fiberhome Telecommunicatio.
Diversification Opportunities for Zhongtong Guomai and Fiberhome Telecommunicatio
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zhongtong and Fiberhome is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Zhongtong Guomai Communication and Fiberhome Telecommunication Te in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiberhome Telecommunicatio and Zhongtong Guomai 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 Zhongtong Guomai Communication are associated (or correlated) with Fiberhome Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fiberhome Telecommunicatio has no effect on the direction of Zhongtong Guomai i.e., Zhongtong Guomai and Fiberhome Telecommunicatio go up and down completely randomly.
Pair Corralation between Zhongtong Guomai and Fiberhome Telecommunicatio
Assuming the 90 days trading horizon Zhongtong Guomai is expected to generate 3.45 times less return on investment than Fiberhome Telecommunicatio. In addition to that, Zhongtong Guomai is 1.18 times more volatile than Fiberhome Telecommunication Technologies. It trades about 0.01 of its total potential returns per unit of risk. Fiberhome Telecommunication Technologies is currently generating about 0.04 per unit of volatility. If you would invest 1,362 in Fiberhome Telecommunication Technologies on September 3, 2024 and sell it today you would earn a total of 461.00 from holding Fiberhome Telecommunication Technologies or generate 33.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhongtong Guomai Communication vs. Fiberhome Telecommunication Te
Performance |
| Timeline |
| Zhongtong Guomai Com |
| Fiberhome Telecommunicatio |
Zhongtong Guomai and Fiberhome Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongtong Guomai and Fiberhome Telecommunicatio
The main advantage of trading using opposite Zhongtong Guomai and Fiberhome Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongtong Guomai position performs unexpectedly, Fiberhome Telecommunicatio 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 Fiberhome Telecommunicatio will offset losses from the drop in Fiberhome Telecommunicatio's long position.| Zhongtong Guomai vs. Agricultural Bank of | Zhongtong Guomai vs. China Construction Bank | Zhongtong Guomai vs. Postal Savings Bank | Zhongtong Guomai vs. Bank of Communications |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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