Correlation Between Hengdian Entertainment and Fibocom Wireless
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By analyzing existing cross correlation between Hengdian Entertainment Co and Fibocom Wireless, you can compare the effects of market volatilities on Hengdian Entertainment and Fibocom Wireless 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 Hengdian Entertainment with a short position of Fibocom Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengdian Entertainment and Fibocom Wireless.
Diversification Opportunities for Hengdian Entertainment and Fibocom Wireless
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hengdian and Fibocom is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Hengdian Entertainment Co and Fibocom Wireless in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fibocom Wireless and Hengdian Entertainment 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 Hengdian Entertainment Co are associated (or correlated) with Fibocom Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fibocom Wireless has no effect on the direction of Hengdian Entertainment i.e., Hengdian Entertainment and Fibocom Wireless go up and down completely randomly.
Pair Corralation between Hengdian Entertainment and Fibocom Wireless
Assuming the 90 days trading horizon Hengdian Entertainment is expected to generate 1.32 times less return on investment than Fibocom Wireless. But when comparing it to its historical volatility, Hengdian Entertainment Co is 1.12 times less risky than Fibocom Wireless. It trades about 0.06 of its potential returns per unit of risk. Fibocom Wireless is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,770 in Fibocom Wireless on October 3, 2024 and sell it today you would earn a total of 245.00 from holding Fibocom Wireless or generate 13.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Hengdian Entertainment Co vs. Fibocom Wireless
Performance |
Timeline |
Hengdian Entertainment |
Fibocom Wireless |
Hengdian Entertainment and Fibocom Wireless Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hengdian Entertainment and Fibocom Wireless
The main advantage of trading using opposite Hengdian Entertainment and Fibocom Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengdian Entertainment position performs unexpectedly, Fibocom Wireless 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 Fibocom Wireless will offset losses from the drop in Fibocom Wireless' long position.Hengdian Entertainment vs. Ming Yang Smart | Hengdian Entertainment vs. 159005 | Hengdian Entertainment vs. Loctek Ergonomic Technology | Hengdian Entertainment vs. Yes Optoelectronics Co |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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