Correlation Between Gome Telecom and Zotye Automobile
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By analyzing existing cross correlation between Gome Telecom Equipment and Zotye Automobile Co, you can compare the effects of market volatilities on Gome Telecom and Zotye Automobile 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 Zotye Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Zotye Automobile.
Diversification Opportunities for Gome Telecom and Zotye Automobile
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gome and Zotye is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Zotye Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zotye Automobile 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 Zotye Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zotye Automobile has no effect on the direction of Gome Telecom i.e., Gome Telecom and Zotye Automobile go up and down completely randomly.
Pair Corralation between Gome Telecom and Zotye Automobile
Assuming the 90 days trading horizon Gome Telecom Equipment is expected to generate 0.79 times more return on investment than Zotye Automobile. However, Gome Telecom Equipment is 1.27 times less risky than Zotye Automobile. It trades about 0.14 of its potential returns per unit of risk. Zotye Automobile Co is currently generating about 0.08 per unit of risk. If you would invest 113.00 in Gome Telecom Equipment on August 31, 2024 and sell it today you would earn a total of 82.00 from holding Gome Telecom Equipment or generate 72.57% 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. Zotye Automobile Co
Performance |
| Timeline |
| Gome Telecom Equipment |
| Zotye Automobile |
Gome Telecom and Zotye Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Zotye Automobile
The main advantage of trading using opposite Gome Telecom and Zotye Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Zotye Automobile 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 Zotye Automobile will offset losses from the drop in Zotye Automobile's long position.| Gome Telecom vs. China State Construction | Gome Telecom vs. China Merchants Shekou | Gome Telecom vs. Huafa Industrial Co | Gome Telecom vs. China International Capital |
| Zotye Automobile vs. China State Construction | Zotye Automobile vs. China Merchants Shekou | Zotye Automobile vs. Huafa Industrial Co | Zotye Automobile 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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