This module allows you to analyze existing cross correlation between Facebook and CHINA LENDING CORP. You can compare the effects of market volatilities on Facebook and CHINA LENDING 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 Facebook with a short position of CHINA LENDING. See also your portfolio center. Please also check ongoing floating volatility patterns of Facebook and CHINA LENDING.
Allowing for the 30-days total investment horizon, Facebook is expected to under-perform the DOW. In addition to that, Facebook is 3.71 times more volatile than DOW. It trades about -0.2 of its total potential returns per unit of risk. DOW is currently generating about 0.22 per unit of volatility. If you would invest 2,604,964 in DOW on August 26, 2018 and sell it today you would earn a total of 51,241 from holding DOW or generate 1.97% return on investment over 30 days.
Overlapping area represents the amount of risk that can be diversified away by holding Facebook Inc and DOW in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on DOW and Facebook 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 Facebook are associated (or correlated) with DOW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DOW has no effect on the direction of Facebook i.e. Facebook and DOW go up and down completely randomly.
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