Correlation Between Gome Telecom and Beijing Kaiwen
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By analyzing existing cross correlation between Gome Telecom Equipment and Beijing Kaiwen Education, you can compare the effects of market volatilities on Gome Telecom and Beijing Kaiwen 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 Beijing Kaiwen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Beijing Kaiwen.
Diversification Opportunities for Gome Telecom and Beijing Kaiwen
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gome and Beijing is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Beijing Kaiwen Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Kaiwen Education 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 Beijing Kaiwen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Kaiwen Education has no effect on the direction of Gome Telecom i.e., Gome Telecom and Beijing Kaiwen go up and down completely randomly.
Pair Corralation between Gome Telecom and Beijing Kaiwen
Assuming the 90 days trading horizon Gome Telecom is expected to generate 1.16 times less return on investment than Beijing Kaiwen. But when comparing it to its historical volatility, Gome Telecom Equipment is 1.08 times less risky than Beijing Kaiwen. It trades about 0.13 of its potential returns per unit of risk. Beijing Kaiwen Education is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 395.00 in Beijing Kaiwen Education on September 2, 2024 and sell it today you would earn a total of 132.00 from holding Beijing Kaiwen Education or generate 33.42% 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. Beijing Kaiwen Education
Performance |
| Timeline |
| Gome Telecom Equipment |
| Beijing Kaiwen Education |
Gome Telecom and Beijing Kaiwen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Beijing Kaiwen
The main advantage of trading using opposite Gome Telecom and Beijing Kaiwen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Beijing Kaiwen 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 Beijing Kaiwen will offset losses from the drop in Beijing Kaiwen's long position.| Gome Telecom vs. Ming Yang Smart | Gome Telecom vs. 159681 | Gome Telecom vs. 159005 | Gome Telecom vs. Loctek Ergonomic Technology |
| Beijing Kaiwen vs. Kweichow Moutai Co | Beijing Kaiwen vs. NAURA Technology Group | Beijing Kaiwen vs. Zhejiang Orient Gene | Beijing Kaiwen vs. APT Medical |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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