Correlation Between Chongqing Brewery and Gome Telecom
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By analyzing existing cross correlation between Chongqing Brewery Co and Gome Telecom Equipment, you can compare the effects of market volatilities on Chongqing Brewery 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 Chongqing Brewery with a short position of Gome Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chongqing Brewery and Gome Telecom.
Diversification Opportunities for Chongqing Brewery and Gome Telecom
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chongqing and Gome is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Chongqing Brewery Co 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 Chongqing Brewery 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 Chongqing Brewery Co 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 Chongqing Brewery i.e., Chongqing Brewery and Gome Telecom go up and down completely randomly.
Pair Corralation between Chongqing Brewery and Gome Telecom
Assuming the 90 days trading horizon Chongqing Brewery Co is expected to generate 0.53 times more return on investment than Gome Telecom. However, Chongqing Brewery Co is 1.9 times less risky than Gome Telecom. It trades about 0.08 of its potential returns per unit of risk. Gome Telecom Equipment is currently generating about 0.01 per unit of risk. If you would invest 5,885 in Chongqing Brewery Co on August 31, 2024 and sell it today you would earn a total of 201.00 from holding Chongqing Brewery Co or generate 3.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chongqing Brewery Co vs. Gome Telecom Equipment
Performance |
| Timeline |
| Chongqing Brewery |
| Gome Telecom Equipment |
Chongqing Brewery and Gome Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chongqing Brewery and Gome Telecom
The main advantage of trading using opposite Chongqing Brewery and Gome Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chongqing Brewery 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.| Chongqing Brewery vs. Lutian Machinery Co | Chongqing Brewery vs. PetroChina Co Ltd | Chongqing Brewery vs. Bank of China | Chongqing Brewery vs. Gansu Jiu Steel |
| Gome Telecom vs. China State Construction | Gome Telecom vs. China Merchants Shekou | Gome Telecom vs. Huafa Industrial Co | Gome Telecom vs. China International Capital |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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