Correlation Between Chengdu PUTIAN and FIH MOBILE
Can any of the company-specific risk be diversified away by investing in both Chengdu PUTIAN and FIH MOBILE at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Chengdu PUTIAN and FIH MOBILE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chengdu PUTIAN Telecommunications and FIH MOBILE, you can compare the effects of market volatilities on Chengdu PUTIAN and FIH MOBILE 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 Chengdu PUTIAN with a short position of FIH MOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu PUTIAN and FIH MOBILE.
Diversification Opportunities for Chengdu PUTIAN and FIH MOBILE
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Chengdu and FIH is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu PUTIAN Telecommunicati and FIH MOBILE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIH MOBILE and Chengdu PUTIAN 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 Chengdu PUTIAN Telecommunications are associated (or correlated) with FIH MOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIH MOBILE has no effect on the direction of Chengdu PUTIAN i.e., Chengdu PUTIAN and FIH MOBILE go up and down completely randomly.
Pair Corralation between Chengdu PUTIAN and FIH MOBILE
Assuming the 90 days trading horizon Chengdu PUTIAN Telecommunications is expected to generate 0.74 times more return on investment than FIH MOBILE. However, Chengdu PUTIAN Telecommunications is 1.36 times less risky than FIH MOBILE. It trades about 0.15 of its potential returns per unit of risk. FIH MOBILE is currently generating about -0.21 per unit of risk. If you would invest 7.15 in Chengdu PUTIAN Telecommunications on November 3, 2024 and sell it today you would earn a total of 0.70 from holding Chengdu PUTIAN Telecommunications or generate 9.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Chengdu PUTIAN Telecommunicati vs. FIH MOBILE
Performance |
| Timeline |
| Chengdu PUTIAN Telec |
| FIH MOBILE |
Chengdu PUTIAN and FIH MOBILE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu PUTIAN and FIH MOBILE
The main advantage of trading using opposite Chengdu PUTIAN and FIH MOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu PUTIAN position performs unexpectedly, FIH MOBILE 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 FIH MOBILE will offset losses from the drop in FIH MOBILE's long position.| Chengdu PUTIAN vs. CARDINAL HEALTH | Chengdu PUTIAN vs. SENECA FOODS A | Chengdu PUTIAN vs. Universal Health Realty | Chengdu PUTIAN vs. Cal Maine Foods |
| FIH MOBILE vs. SIVERS SEMICONDUCTORS AB | FIH MOBILE vs. NorAm Drilling AS | FIH MOBILE vs. Volkswagen AG | FIH MOBILE vs. Darden Restaurants |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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