Correlation Between Gome Telecom and Zhongshan Broad
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By analyzing existing cross correlation between Gome Telecom Equipment and Zhongshan Broad Ocean Motor, you can compare the effects of market volatilities on Gome Telecom and Zhongshan Broad 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 Zhongshan Broad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Zhongshan Broad.
Diversification Opportunities for Gome Telecom and Zhongshan Broad
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gome and Zhongshan is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Zhongshan Broad Ocean Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongshan Broad Ocean 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 Zhongshan Broad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongshan Broad Ocean has no effect on the direction of Gome Telecom i.e., Gome Telecom and Zhongshan Broad go up and down completely randomly.
Pair Corralation between Gome Telecom and Zhongshan Broad
Assuming the 90 days trading horizon Gome Telecom Equipment is expected to generate 1.86 times more return on investment than Zhongshan Broad. However, Gome Telecom is 1.86 times more volatile than Zhongshan Broad Ocean Motor. It trades about 0.16 of its potential returns per unit of risk. Zhongshan Broad Ocean Motor 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. Zhongshan Broad Ocean Motor
Performance |
| Timeline |
| Gome Telecom Equipment |
| Zhongshan Broad Ocean |
Gome Telecom and Zhongshan Broad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Zhongshan Broad
The main advantage of trading using opposite Gome Telecom and Zhongshan Broad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Zhongshan Broad 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 Zhongshan Broad will offset losses from the drop in Zhongshan Broad'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 |
| Zhongshan Broad vs. Cultural Investment Holdings | Zhongshan Broad vs. Gome Telecom Equipment | Zhongshan Broad vs. Bus Online Co | Zhongshan Broad vs. Holitech Technology Co |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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