Correlation Between Threes Company and Hubei Forbon

Can any of the company-specific risk be diversified away by investing in both Threes Company and Hubei Forbon 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 Threes Company and Hubei Forbon into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Threes Company Media and Hubei Forbon Technology, you can compare the effects of market volatilities on Threes Company and Hubei Forbon 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 Threes Company with a short position of Hubei Forbon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Threes Company and Hubei Forbon.

Diversification Opportunities for Threes Company and Hubei Forbon

-0.18

Correlation Coefficient

Threes Company  Hubei Forbon

Good diversification

The 3 months correlation between Threes and Hubei is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Threes Company Media and Hubei Forbon Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Forbon Technology and Threes Company 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 Threes Company Media are associated (or correlated) with Hubei Forbon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Forbon Technology has no effect on the direction of Threes Company i.e., Threes Company and Hubei Forbon go up and down completely randomly.

Pair Corralation between Threes Company and Hubei Forbon

Assuming the 90 days trading horizon Threes Company Media is expected to under-perform the Hubei Forbon. In addition to that, Threes Company is 1.14 times more volatile than Hubei Forbon Technology. It trades about -0.13 of its total potential returns per unit of risk. Hubei Forbon Technology is currently generating about 0.07 per unit of volatility. If you would invest  832.00  in Hubei Forbon Technology on December 24, 2024 and sell it today you would earn a total of  76.00  from holding Hubei Forbon Technology or generate 9.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Threes Company Media  vs.  Hubei Forbon Technology

Threes Company

Risk-Adjusted Performance

Very Weak

Over the last 90 days Threes Company Media has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Hubei Forbon Technology

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hubei Forbon Technology are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hubei Forbon may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Threes Company and Hubei Forbon

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

The idea behind Threes Company Media and Hubei Forbon Technology 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.