Correlation Between Fiberhome Telecommunicatio and Bosera CMSK
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By analyzing existing cross correlation between Fiberhome Telecommunication Technologies and Bosera CMSK Industrial, you can compare the effects of market volatilities on Fiberhome Telecommunicatio and Bosera CMSK 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 Bosera CMSK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiberhome Telecommunicatio and Bosera CMSK.
Diversification Opportunities for Fiberhome Telecommunicatio and Bosera CMSK
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fiberhome and Bosera is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Fiberhome Telecommunication Te and Bosera CMSK Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bosera CMSK Industrial 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 Bosera CMSK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bosera CMSK Industrial has no effect on the direction of Fiberhome Telecommunicatio i.e., Fiberhome Telecommunicatio and Bosera CMSK go up and down completely randomly.
Pair Corralation between Fiberhome Telecommunicatio and Bosera CMSK
Assuming the 90 days trading horizon Fiberhome Telecommunication Technologies is expected to generate 3.32 times more return on investment than Bosera CMSK. However, Fiberhome Telecommunicatio is 3.32 times more volatile than Bosera CMSK Industrial. It trades about 0.12 of its potential returns per unit of risk. Bosera CMSK Industrial is currently generating about 0.16 per unit of risk. If you would invest 1,478 in Fiberhome Telecommunication Technologies on October 22, 2024 and sell it today you would earn a total of 441.00 from holding Fiberhome Telecommunication Technologies or generate 29.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Fiberhome Telecommunication Te vs. Bosera CMSK Industrial
Performance |
Timeline |
Fiberhome Telecommunicatio |
Bosera CMSK Industrial |
Fiberhome Telecommunicatio and Bosera CMSK Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fiberhome Telecommunicatio and Bosera CMSK
The main advantage of trading using opposite Fiberhome Telecommunicatio and Bosera CMSK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiberhome Telecommunicatio position performs unexpectedly, Bosera CMSK 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 Bosera CMSK will offset losses from the drop in Bosera CMSK's long position.The idea behind Fiberhome Telecommunication Technologies and Bosera CMSK Industrial 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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