Correlation Between Gome Telecom and Gotion High
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By analyzing existing cross correlation between Gome Telecom Equipment and Gotion High tech, you can compare the effects of market volatilities on Gome Telecom and Gotion High 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 Gotion High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Gotion High.
Diversification Opportunities for Gome Telecom and Gotion High
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gome and Gotion is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Gotion High tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gotion High 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 Gotion High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gotion High tech has no effect on the direction of Gome Telecom i.e., Gome Telecom and Gotion High go up and down completely randomly.
Pair Corralation between Gome Telecom and Gotion High
Assuming the 90 days trading horizon Gome Telecom Equipment is expected to generate 1.32 times more return on investment than Gotion High. However, Gome Telecom is 1.32 times more volatile than Gotion High tech. It trades about 0.16 of its potential returns per unit of risk. Gotion High tech is currently generating about 0.06 per unit of risk. If you would invest 102.00 in Gome Telecom Equipment on September 3, 2024 and sell it today you would earn a total of 88.00 from holding Gome Telecom Equipment or generate 86.27% 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. Gotion High tech
Performance |
| Timeline |
| Gome Telecom Equipment |
| Gotion High tech |
Gome Telecom and Gotion High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Gotion High
The main advantage of trading using opposite Gome Telecom and Gotion High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Gotion High 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 Gotion High will offset losses from the drop in Gotion High'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 |
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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