Correlation Between Bengang Steel and Gome Telecom
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By analyzing existing cross correlation between Bengang Steel Plates and Gome Telecom Equipment, you can compare the effects of market volatilities on Bengang Steel and Gome Telecom 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 Bengang Steel with a short position of Gome Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bengang Steel and Gome Telecom.
Diversification Opportunities for Bengang Steel and Gome Telecom
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bengang and Gome is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Bengang Steel Plates and Gome Telecom Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gome Telecom Equipment and Bengang Steel 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 Bengang Steel Plates are associated (or correlated) with Gome Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gome Telecom Equipment has no effect on the direction of Bengang Steel i.e., Bengang Steel and Gome Telecom go up and down completely randomly.
Pair Corralation between Bengang Steel and Gome Telecom
Assuming the 90 days trading horizon Bengang Steel Plates is expected to under-perform the Gome Telecom. But the stock apears to be less risky and, when comparing its historical volatility, Bengang Steel Plates is 2.03 times less risky than Gome Telecom. The stock trades about -0.18 of its potential returns per unit of risk. The Gome Telecom Equipment is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 186.00 in Gome Telecom Equipment on September 1, 2024 and sell it today you would earn a total of 4.00 from holding Gome Telecom Equipment or generate 2.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bengang Steel Plates vs. Gome Telecom Equipment
Performance |
| Timeline |
| Bengang Steel Plates |
| Gome Telecom Equipment |
Bengang Steel and Gome Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bengang Steel and Gome Telecom
The main advantage of trading using opposite Bengang Steel and Gome Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bengang Steel position performs unexpectedly, Gome Telecom 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 Gome Telecom will offset losses from the drop in Gome Telecom's long position.| Bengang Steel vs. Gome Telecom Equipment | Bengang Steel vs. Shenzhen Kexin Communication | Bengang Steel vs. Wuhan Yangtze Communication | Bengang Steel vs. Sportsoul Co Ltd |
| Gome Telecom vs. Broadex Technologies Co | Gome Telecom vs. Changchun Engley Automobile | Gome Telecom vs. Anhui Jianghuai Automobile | Gome Telecom vs. Chongqing Changan Automobile |
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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