Correlation Between Gome Telecom and Sichuan Fulin
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By analyzing existing cross correlation between Gome Telecom Equipment and Sichuan Fulin Transportation, you can compare the effects of market volatilities on Gome Telecom and Sichuan Fulin 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 Sichuan Fulin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Sichuan Fulin.
Diversification Opportunities for Gome Telecom and Sichuan Fulin
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gome and Sichuan is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Sichuan Fulin Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Fulin Transp 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 Sichuan Fulin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Fulin Transp has no effect on the direction of Gome Telecom i.e., Gome Telecom and Sichuan Fulin go up and down completely randomly.
Pair Corralation between Gome Telecom and Sichuan Fulin
Assuming the 90 days trading horizon Gome Telecom Equipment is expected to under-perform the Sichuan Fulin. In addition to that, Gome Telecom is 1.22 times more volatile than Sichuan Fulin Transportation. It trades about -0.05 of its total potential returns per unit of risk. Sichuan Fulin Transportation is currently generating about 0.03 per unit of volatility. If you would invest 626.00 in Sichuan Fulin Transportation on August 31, 2024 and sell it today you would earn a total of 81.00 from holding Sichuan Fulin Transportation or generate 12.94% 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. Sichuan Fulin Transportation
Performance |
| Timeline |
| Gome Telecom Equipment |
| Sichuan Fulin Transp |
Gome Telecom and Sichuan Fulin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Sichuan Fulin
The main advantage of trading using opposite Gome Telecom and Sichuan Fulin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Sichuan Fulin 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 Sichuan Fulin will offset losses from the drop in Sichuan Fulin's long position.| Gome Telecom vs. China State Construction | Gome Telecom vs. China Merchants Shekou | Gome Telecom vs. Huafa Industrial Co | Gome Telecom vs. China International Capital |
| Sichuan Fulin vs. Cultural Investment Holdings | Sichuan Fulin vs. Gome Telecom Equipment | Sichuan Fulin vs. Bus Online Co | Sichuan Fulin 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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