Correlation Between Road Environment and Sihui Fuji
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By analyzing existing cross correlation between Road Environment Technology and Sihui Fuji Electronics, you can compare the effects of market volatilities on Road Environment and Sihui Fuji 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 Road Environment with a short position of Sihui Fuji. Check out your portfolio center. Please also check ongoing floating volatility patterns of Road Environment and Sihui Fuji.
Diversification Opportunities for Road Environment and Sihui Fuji
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Road and Sihui is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Road Environment Technology and Sihui Fuji Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sihui Fuji Electronics and Road Environment 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 Road Environment Technology are associated (or correlated) with Sihui Fuji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sihui Fuji Electronics has no effect on the direction of Road Environment i.e., Road Environment and Sihui Fuji go up and down completely randomly.
Pair Corralation between Road Environment and Sihui Fuji
Assuming the 90 days trading horizon Road Environment is expected to generate 30.54 times less return on investment than Sihui Fuji. But when comparing it to its historical volatility, Road Environment Technology is 2.14 times less risky than Sihui Fuji. It trades about 0.03 of its potential returns per unit of risk. Sihui Fuji Electronics is currently generating about 0.49 of returns per unit of risk over similar time horizon. If you would invest 2,585 in Sihui Fuji Electronics on November 8, 2024 and sell it today you would earn a total of 991.00 from holding Sihui Fuji Electronics or generate 38.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Road Environment Technology vs. Sihui Fuji Electronics
Performance |
| Timeline |
| Road Environment Tec |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sihui Fuji Electronics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Road Environment and Sihui Fuji Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Road Environment and Sihui Fuji
The main advantage of trading using opposite Road Environment and Sihui Fuji positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Road Environment position performs unexpectedly, Sihui Fuji 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 Sihui Fuji will offset losses from the drop in Sihui Fuji's long position.The idea behind Road Environment Technology and Sihui Fuji Electronics 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.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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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