Correlation Between Gome Telecom and Hengli Industrial
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By analyzing existing cross correlation between Gome Telecom Equipment and Hengli Industrial Development, you can compare the effects of market volatilities on Gome Telecom and Hengli Industrial 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 Gome Telecom with a short position of Hengli Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Hengli Industrial.
Diversification Opportunities for Gome Telecom and Hengli Industrial
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gome and Hengli is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Hengli Industrial Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengli Industrial and Gome Telecom 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 Gome Telecom Equipment are associated (or correlated) with Hengli Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengli Industrial has no effect on the direction of Gome Telecom i.e., Gome Telecom and Hengli Industrial go up and down completely randomly.
Pair Corralation between Gome Telecom and Hengli Industrial
Assuming the 90 days trading horizon Gome Telecom is expected to generate 1.85 times less return on investment than Hengli Industrial. But when comparing it to its historical volatility, Gome Telecom Equipment is 1.14 times less risky than Hengli Industrial. It trades about 0.15 of its potential returns per unit of risk. Hengli Industrial Development is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 185.00 in Hengli Industrial Development on September 4, 2024 and sell it today you would earn a total of 40.00 from holding Hengli Industrial Development or generate 21.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gome Telecom Equipment vs. Hengli Industrial Development
Performance |
| Timeline |
| Gome Telecom Equipment |
| Hengli Industrial |
Gome Telecom and Hengli Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Hengli Industrial
The main advantage of trading using opposite Gome Telecom and Hengli Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Hengli Industrial 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 Hengli Industrial will offset losses from the drop in Hengli Industrial's long position.| Gome Telecom vs. Biwin Storage Technology | Gome Telecom vs. PetroChina Co Ltd | Gome Telecom vs. Industrial and Commercial | Gome Telecom vs. China Construction Bank |
| Hengli Industrial vs. Cultural Investment Holdings | Hengli Industrial vs. Gome Telecom Equipment | Hengli Industrial vs. Bus Online Co | Hengli Industrial vs. Holitech Technology Co |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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