Correlation Between Fiberhome Telecommunicatio and Guangdong Banbao

Can any of the company-specific risk be diversified away by investing in both Fiberhome Telecommunicatio and Guangdong Banbao 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 Guangdong Banbao 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 Guangdong Banbao Toy, you can compare the effects of market volatilities on Fiberhome Telecommunicatio and Guangdong Banbao 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 Guangdong Banbao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiberhome Telecommunicatio and Guangdong Banbao.

Diversification Opportunities for Fiberhome Telecommunicatio and Guangdong Banbao

0.0

Correlation Coefficient

Fiberhome Telecommunicatio  Guangdong Banbao

Pay attention - limited upside

The 3 months correlation between Fiberhome and Guangdong is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fiberhome Telecommunication Te and Guangdong Banbao Toy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Banbao Toy 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 Guangdong Banbao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Banbao Toy has no effect on the direction of Fiberhome Telecommunicatio i.e., Fiberhome Telecommunicatio and Guangdong Banbao go up and down completely randomly.

Pair Corralation between Fiberhome Telecommunicatio and Guangdong Banbao

If you would invest  2,025  in Fiberhome Telecommunication Technologies on October 22, 2024 and sell it today you would lose (106.00) from holding Fiberhome Telecommunication Technologies or give up 5.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Fiberhome Telecommunication Te  vs.  Guangdong Banbao Toy

Fiberhome Telecommunicatio

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fiberhome Telecommunication Technologies are ranked lower than 5 (%) 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.

Guangdong Banbao Toy

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Guangdong Banbao Toy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Guangdong Banbao is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fiberhome Telecommunicatio and Guangdong Banbao

The main advantage of trading using opposite Fiberhome Telecommunicatio and Guangdong Banbao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiberhome Telecommunicatio position performs unexpectedly, Guangdong Banbao 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 Guangdong Banbao will offset losses from the drop in Guangdong Banbao's long position.

The idea behind Fiberhome Telecommunication Technologies and Guangdong Banbao Toy 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.