Correlation Between Fiberhome Telecommunicatio and Flat Glass

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Can any of the company-specific risk be diversified away by investing in both Fiberhome Telecommunicatio and Flat Glass 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 Fiberhome Telecommunicatio and Flat Glass into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fiberhome Telecommunication Technologies and Flat Glass Group, you can compare the effects of market volatilities on Fiberhome Telecommunicatio and Flat Glass 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 Flat Glass. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiberhome Telecommunicatio and Flat Glass.

Diversification Opportunities for Fiberhome Telecommunicatio and Flat Glass

0.86
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Fiberhome and Flat is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Fiberhome Telecommunication Te and Flat Glass Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flat Glass Group 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 Flat Glass. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flat Glass Group has no effect on the direction of Fiberhome Telecommunicatio i.e., Fiberhome Telecommunicatio and Flat Glass go up and down completely randomly.

Pair Corralation between Fiberhome Telecommunicatio and Flat Glass

Assuming the 90 days trading horizon Fiberhome Telecommunication Technologies is expected to generate 0.89 times more return on investment than Flat Glass. However, Fiberhome Telecommunication Technologies is 1.12 times less risky than Flat Glass. It trades about 0.28 of its potential returns per unit of risk. Flat Glass Group is currently generating about -0.33 per unit of risk. If you would invest  1,758  in Fiberhome Telecommunication Technologies on September 24, 2024 and sell it today you would earn a total of  197.00  from holding Fiberhome Telecommunication Technologies or generate 11.21% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Fiberhome Telecommunication Te  vs.  Flat Glass Group

 Performance 
       Timeline  
Fiberhome Telecommunicatio 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Fiberhome Telecommunication Technologies are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Fiberhome Telecommunicatio sustained solid returns over the last few months and may actually be approaching a breakup point.
Flat Glass Group 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Flat Glass Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Flat Glass sustained solid returns over the last few months and may actually be approaching a breakup point.

Fiberhome Telecommunicatio and Flat Glass Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Fiberhome Telecommunicatio and Flat Glass

The main advantage of trading using opposite Fiberhome Telecommunicatio and Flat Glass positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiberhome Telecommunicatio position performs unexpectedly, Flat Glass 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 Flat Glass will offset losses from the drop in Flat Glass' long position.
The idea behind Fiberhome Telecommunication Technologies and Flat Glass Group 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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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 Stocks Directory module to find actively traded stocks across global markets.

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