Correlation Between Gome Telecom and Westone Information
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By analyzing existing cross correlation between Gome Telecom Equipment and Westone Information Industry, you can compare the effects of market volatilities on Gome Telecom and Westone Information 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 Westone Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Westone Information.
Diversification Opportunities for Gome Telecom and Westone Information
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gome and Westone is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Westone Information Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westone Information 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 Westone Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westone Information has no effect on the direction of Gome Telecom i.e., Gome Telecom and Westone Information go up and down completely randomly.
Pair Corralation between Gome Telecom and Westone Information
Assuming the 90 days trading horizon Gome Telecom Equipment is expected to generate 1.08 times more return on investment than Westone Information. However, Gome Telecom is 1.08 times more volatile than Westone Information Industry. It trades about 0.1 of its potential returns per unit of risk. Westone Information Industry is currently generating about -0.01 per unit of risk. If you would invest 169.00 in Gome Telecom Equipment on September 3, 2024 and sell it today you would earn a total of 21.00 from holding Gome Telecom Equipment or generate 12.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gome Telecom Equipment vs. Westone Information Industry
Performance |
| Timeline |
| Gome Telecom Equipment |
| Westone Information |
Gome Telecom and Westone Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Westone Information
The main advantage of trading using opposite Gome Telecom and Westone Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Westone Information 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 Westone Information will offset losses from the drop in Westone Information'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 |
| Westone Information vs. Agricultural Bank of | Westone Information vs. China Construction Bank | Westone Information vs. Postal Savings Bank | Westone Information vs. Bank of Communications |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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