Correlation Between Gome Telecom and Sportsoul
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By analyzing existing cross correlation between Gome Telecom Equipment and Sportsoul Co Ltd, you can compare the effects of market volatilities on Gome Telecom and Sportsoul 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 Sportsoul. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Sportsoul.
Diversification Opportunities for Gome Telecom and Sportsoul
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gome and Sportsoul is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Sportsoul Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sportsoul 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 Sportsoul. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sportsoul has no effect on the direction of Gome Telecom i.e., Gome Telecom and Sportsoul go up and down completely randomly.
Pair Corralation between Gome Telecom and Sportsoul
Assuming the 90 days trading horizon Gome Telecom Equipment is expected to generate 1.2 times more return on investment than Sportsoul. However, Gome Telecom is 1.2 times more volatile than Sportsoul Co Ltd. It trades about 0.1 of its potential returns per unit of risk. Sportsoul Co Ltd is currently generating about 0.04 per unit of risk. If you would invest 124.00 in Gome Telecom Equipment on September 3, 2024 and sell it today you would earn a total of 66.00 from holding Gome Telecom Equipment or generate 53.23% 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. Sportsoul Co Ltd
Performance |
| Timeline |
| Gome Telecom Equipment |
| Sportsoul |
Gome Telecom and Sportsoul Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Sportsoul
The main advantage of trading using opposite Gome Telecom and Sportsoul positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Sportsoul 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 Sportsoul will offset losses from the drop in Sportsoul's long position.| Gome Telecom vs. PetroChina Co Ltd | Gome Telecom vs. China Mobile Limited | Gome Telecom vs. Industrial and Commercial | Gome Telecom vs. China Life Insurance |
| Sportsoul vs. PetroChina Co Ltd | Sportsoul vs. China Mobile Limited | Sportsoul vs. Industrial and Commercial | Sportsoul vs. China Life Insurance |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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