Correlation Between Gome Telecom and Guangzhou Haige
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By analyzing existing cross correlation between Gome Telecom Equipment and Guangzhou Haige Communications, you can compare the effects of market volatilities on Gome Telecom and Guangzhou Haige 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 Guangzhou Haige. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Guangzhou Haige.
Diversification Opportunities for Gome Telecom and Guangzhou Haige
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gome and Guangzhou is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Guangzhou Haige Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Haige Comm 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 Guangzhou Haige. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Haige Comm has no effect on the direction of Gome Telecom i.e., Gome Telecom and Guangzhou Haige go up and down completely randomly.
Pair Corralation between Gome Telecom and Guangzhou Haige
Assuming the 90 days trading horizon Gome Telecom is expected to generate 15.7 times less return on investment than Guangzhou Haige. But when comparing it to its historical volatility, Gome Telecom Equipment is 1.0 times less risky than Guangzhou Haige. It trades about 0.01 of its potential returns per unit of risk. Guangzhou Haige Communications is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 832.00 in Guangzhou Haige Communications on September 12, 2024 and sell it today you would earn a total of 441.00 from holding Guangzhou Haige Communications or generate 53.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.28% |
| Values | Daily Returns |
Gome Telecom Equipment vs. Guangzhou Haige Communications
Performance |
| Timeline |
| Gome Telecom Equipment |
| Guangzhou Haige Comm |
Gome Telecom and Guangzhou Haige Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Guangzhou Haige
The main advantage of trading using opposite Gome Telecom and Guangzhou Haige positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Guangzhou Haige 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 Guangzhou Haige will offset losses from the drop in Guangzhou Haige's long position.| Gome Telecom vs. Industrial and Commercial | Gome Telecom vs. Agricultural Bank of | Gome Telecom vs. China Construction Bank | Gome Telecom vs. Bank of China |
| Guangzhou Haige vs. Industrial and Commercial | Guangzhou Haige vs. China Construction Bank | Guangzhou Haige vs. Bank of China | Guangzhou Haige vs. Agricultural Bank of |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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