Correlation Between Sportsoul and Gome Telecom
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By analyzing existing cross correlation between Sportsoul Co Ltd and Gome Telecom Equipment, you can compare the effects of market volatilities on Sportsoul 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 Sportsoul with a short position of Gome Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sportsoul and Gome Telecom.
Diversification Opportunities for Sportsoul and Gome Telecom
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sportsoul and Gome is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Sportsoul Co Ltd 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 Sportsoul 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 Sportsoul Co Ltd 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 Sportsoul i.e., Sportsoul and Gome Telecom go up and down completely randomly.
Pair Corralation between Sportsoul and Gome Telecom
Assuming the 90 days trading horizon Sportsoul Co Ltd is expected to generate 1.13 times more return on investment than Gome Telecom. However, Sportsoul is 1.13 times more volatile than Gome Telecom Equipment. It trades about 0.01 of its potential returns per unit of risk. Gome Telecom Equipment is currently generating about -0.12 per unit of risk. If you would invest 1,458 in Sportsoul Co Ltd on November 30, 2024 and sell it today you would lose (265.00) from holding Sportsoul Co Ltd or give up 18.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sportsoul Co Ltd vs. Gome Telecom Equipment
Performance |
| Timeline |
| Sportsoul |
| Gome Telecom Equipment |
Sportsoul and Gome Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sportsoul and Gome Telecom
The main advantage of trading using opposite Sportsoul and Gome Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sportsoul 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.| Sportsoul vs. Fujian Nebula Electronics | Sportsoul vs. Hengerda New Materials | Sportsoul vs. Chongqing Sulian Plastic | Sportsoul vs. Yonghui Superstores Co |
| Gome Telecom vs. China Sports Industry | Gome Telecom vs. Time Publishing and | Gome Telecom vs. China Publishing Media | Gome Telecom vs. Hunan TV Broadcast |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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