Correlation Between Gome Telecom and Aerospace
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By analyzing existing cross correlation between Gome Telecom Equipment and Aerospace Hi Tech Holding, you can compare the effects of market volatilities on Gome Telecom and Aerospace 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 Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Aerospace.
Diversification Opportunities for Gome Telecom and Aerospace
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gome and Aerospace is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Aerospace Hi Tech Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aerospace Hi Tech 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 Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aerospace Hi Tech has no effect on the direction of Gome Telecom i.e., Gome Telecom and Aerospace go up and down completely randomly.
Pair Corralation between Gome Telecom and Aerospace
Assuming the 90 days trading horizon Gome Telecom Equipment is expected to generate 1.22 times more return on investment than Aerospace. However, Gome Telecom is 1.22 times more volatile than Aerospace Hi Tech Holding. It trades about 0.0 of its potential returns per unit of risk. Aerospace Hi Tech Holding is currently generating about -0.12 per unit of risk. If you would invest 185.00 in Gome Telecom Equipment on September 12, 2024 and sell it today you would lose (2.00) from holding Gome Telecom Equipment or give up 1.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gome Telecom Equipment vs. Aerospace Hi Tech Holding
Performance |
| Timeline |
| Gome Telecom Equipment |
| Aerospace Hi Tech |
Gome Telecom and Aerospace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Aerospace
The main advantage of trading using opposite Gome Telecom and Aerospace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Aerospace 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 Aerospace will offset losses from the drop in Aerospace's long position.| Gome Telecom vs. Lutian Machinery Co | Gome Telecom vs. PetroChina Co Ltd | Gome Telecom vs. Bank of China | Gome Telecom vs. Gansu Jiu Steel |
| Aerospace vs. Lutian Machinery Co | Aerospace vs. PetroChina Co Ltd | Aerospace vs. Bank of China | Aerospace vs. Gansu Jiu Steel |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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