Correlation Between Huafa Industrial and Gome Telecom
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By analyzing existing cross correlation between Huafa Industrial Co and Gome Telecom Equipment, you can compare the effects of market volatilities on Huafa Industrial 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 Huafa Industrial with a short position of Gome Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huafa Industrial and Gome Telecom.
Diversification Opportunities for Huafa Industrial and Gome Telecom
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Huafa and Gome is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Huafa Industrial 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 Huafa Industrial 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 Huafa Industrial 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 Huafa Industrial i.e., Huafa Industrial and Gome Telecom go up and down completely randomly.
Pair Corralation between Huafa Industrial and Gome Telecom
Assuming the 90 days trading horizon Huafa Industrial Co is expected to generate 0.81 times more return on investment than Gome Telecom. However, Huafa Industrial Co is 1.23 times less risky than Gome Telecom. It trades about -0.02 of its potential returns per unit of risk. Gome Telecom Equipment is currently generating about -0.06 per unit of risk. If you would invest 957.00 in Huafa Industrial Co on September 2, 2024 and sell it today you would lose (285.00) from holding Huafa Industrial Co or give up 29.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huafa Industrial Co vs. Gome Telecom Equipment
Performance |
| Timeline |
| Huafa Industrial |
| Gome Telecom Equipment |
Huafa Industrial and Gome Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huafa Industrial and Gome Telecom
The main advantage of trading using opposite Huafa Industrial and Gome Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huafa Industrial 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.| Huafa Industrial vs. Ningbo Fangzheng Automobile | Huafa Industrial vs. Anhui Jianghuai Automobile | Huafa Industrial vs. Jinhe Biotechnology Co | Huafa Industrial vs. Guangzhou KingTeller Technology |
| Gome Telecom vs. Ming Yang Smart | Gome Telecom vs. 159681 | Gome Telecom vs. 159005 | Gome Telecom vs. Loctek Ergonomic Technology |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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