Correlation Between Gome Telecom and Changchun
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By analyzing existing cross correlation between Gome Telecom Equipment and Changchun UP Optotech, you can compare the effects of market volatilities on Gome Telecom and Changchun 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 Changchun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Changchun.
Diversification Opportunities for Gome Telecom and Changchun
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gome and Changchun is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Changchun UP Optotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changchun UP Optotech 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 Changchun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changchun UP Optotech has no effect on the direction of Gome Telecom i.e., Gome Telecom and Changchun go up and down completely randomly.
Pair Corralation between Gome Telecom and Changchun
Assuming the 90 days trading horizon Gome Telecom Equipment is expected to under-perform the Changchun. But the stock apears to be less risky and, when comparing its historical volatility, Gome Telecom Equipment is 1.09 times less risky than Changchun. The stock trades about -0.06 of its potential returns per unit of risk. The Changchun UP Optotech is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,523 in Changchun UP Optotech on September 2, 2024 and sell it today you would earn a total of 1,632 from holding Changchun UP Optotech or generate 64.68% 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. Changchun UP Optotech
Performance |
| Timeline |
| Gome Telecom Equipment |
| Changchun UP Optotech |
Gome Telecom and Changchun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Changchun
The main advantage of trading using opposite Gome Telecom and Changchun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Changchun 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 Changchun will offset losses from the drop in Changchun's long position.| Gome Telecom vs. Ming Yang Smart | Gome Telecom vs. 159681 | Gome Telecom vs. 159005 | Gome Telecom vs. Loctek Ergonomic Technology |
| Changchun vs. Jiangsu Phoenix Publishing | Changchun vs. Western Metal Materials | Changchun vs. Tibet Huayu Mining | Changchun vs. Time Publishing and |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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