Correlation Between Sinosteel Luonai and Fiberhome Telecommunicatio
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By analyzing existing cross correlation between Sinosteel Luonai Materials and Fiberhome Telecommunication Technologies, you can compare the effects of market volatilities on Sinosteel Luonai 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 Sinosteel Luonai with a short position of Fiberhome Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinosteel Luonai and Fiberhome Telecommunicatio.
Diversification Opportunities for Sinosteel Luonai and Fiberhome Telecommunicatio
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sinosteel and Fiberhome is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Sinosteel Luonai Materials and Fiberhome Telecommunication Te in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiberhome Telecommunicatio and Sinosteel Luonai 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 Sinosteel Luonai Materials 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 Sinosteel Luonai i.e., Sinosteel Luonai and Fiberhome Telecommunicatio go up and down completely randomly.
Pair Corralation between Sinosteel Luonai and Fiberhome Telecommunicatio
Assuming the 90 days trading horizon Sinosteel Luonai Materials is expected to generate 0.95 times more return on investment than Fiberhome Telecommunicatio. However, Sinosteel Luonai Materials is 1.05 times less risky than Fiberhome Telecommunicatio. It trades about -0.13 of its potential returns per unit of risk. Fiberhome Telecommunication Technologies is currently generating about -0.25 per unit of risk. If you would invest 465.00 in Sinosteel Luonai Materials on September 12, 2024 and sell it today you would lose (26.00) from holding Sinosteel Luonai Materials or give up 5.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinosteel Luonai Materials vs. Fiberhome Telecommunication Te
Performance |
| Timeline |
| Sinosteel Luonai Mat |
| Fiberhome Telecommunicatio |
Sinosteel Luonai and Fiberhome Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinosteel Luonai and Fiberhome Telecommunicatio
The main advantage of trading using opposite Sinosteel Luonai and Fiberhome Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinosteel Luonai 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.| Sinosteel Luonai vs. Zijin Mining Group | Sinosteel Luonai vs. Wanhua Chemical Group | Sinosteel Luonai vs. Baoshan Iron Steel | Sinosteel Luonai vs. Rongsheng Petrochemical Co |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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