Correlation Between Zhejiang Qianjiang and Gome Telecom
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By analyzing existing cross correlation between Zhejiang Qianjiang Motorcycle and Gome Telecom Equipment, you can compare the effects of market volatilities on Zhejiang Qianjiang 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 Zhejiang Qianjiang with a short position of Gome Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Qianjiang and Gome Telecom.
Diversification Opportunities for Zhejiang Qianjiang and Gome Telecom
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Zhejiang and Gome is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Qianjiang Motorcycle 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 Zhejiang Qianjiang 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 Zhejiang Qianjiang Motorcycle 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 Zhejiang Qianjiang i.e., Zhejiang Qianjiang and Gome Telecom go up and down completely randomly.
Pair Corralation between Zhejiang Qianjiang and Gome Telecom
Assuming the 90 days trading horizon Zhejiang Qianjiang Motorcycle is expected to generate 1.47 times more return on investment than Gome Telecom. However, Zhejiang Qianjiang is 1.47 times more volatile than Gome Telecom Equipment. It trades about 0.19 of its potential returns per unit of risk. Gome Telecom Equipment is currently generating about -1.24 per unit of risk. If you would invest 1,682 in Zhejiang Qianjiang Motorcycle on October 24, 2024 and sell it today you would earn a total of 231.00 from holding Zhejiang Qianjiang Motorcycle or generate 13.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhejiang Qianjiang Motorcycle vs. Gome Telecom Equipment
Performance |
| Timeline |
| Zhejiang Qianjiang |
| Gome Telecom Equipment |
Zhejiang Qianjiang and Gome Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Qianjiang and Gome Telecom
The main advantage of trading using opposite Zhejiang Qianjiang and Gome Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Qianjiang 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.| Zhejiang Qianjiang vs. Hunan Mendale Hometextile | Zhejiang Qianjiang vs. Guocheng Mining Co | Zhejiang Qianjiang vs. Jinhui Mining Co | Zhejiang Qianjiang vs. Zijin Mining Group |
| Gome Telecom vs. Zotye Automobile Co | Gome Telecom vs. Zhejiang Qianjiang Motorcycle | Gome Telecom vs. Thinkon Semiconductor Jinzhou | Gome Telecom vs. Haima Automobile Group |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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