Correlation Between Gome Telecom and Topsec Technologies
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By analyzing existing cross correlation between Gome Telecom Equipment and Topsec Technologies Group, you can compare the effects of market volatilities on Gome Telecom and Topsec Technologies 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 Topsec Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Topsec Technologies.
Diversification Opportunities for Gome Telecom and Topsec Technologies
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gome and Topsec is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Topsec Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Topsec Technologies 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 Topsec Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Topsec Technologies has no effect on the direction of Gome Telecom i.e., Gome Telecom and Topsec Technologies go up and down completely randomly.
Pair Corralation between Gome Telecom and Topsec Technologies
Assuming the 90 days trading horizon Gome Telecom Equipment is expected to under-perform the Topsec Technologies. In addition to that, Gome Telecom is 1.16 times more volatile than Topsec Technologies Group. It trades about -0.04 of its total potential returns per unit of risk. Topsec Technologies Group is currently generating about -0.02 per unit of volatility. If you would invest 1,077 in Topsec Technologies Group on September 12, 2024 and sell it today you would lose (346.00) from holding Topsec Technologies Group or give up 32.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gome Telecom Equipment vs. Topsec Technologies Group
Performance |
| Timeline |
| Gome Telecom Equipment |
| Topsec Technologies |
Gome Telecom and Topsec Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Topsec Technologies
The main advantage of trading using opposite Gome Telecom and Topsec Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Topsec Technologies 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 Topsec Technologies will offset losses from the drop in Topsec Technologies' 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 |
| Topsec Technologies vs. Zhengzhou Coal Mining | Topsec Technologies vs. Chengdu Xinzhu RoadBridge | Topsec Technologies vs. Chengtun Mining Group | Topsec Technologies vs. BTG Hotels Group |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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