Correlation Between Gome Telecom and Fujian Longzhou
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By analyzing existing cross correlation between Gome Telecom Equipment and Fujian Longzhou Transportation, you can compare the effects of market volatilities on Gome Telecom and Fujian Longzhou 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 Fujian Longzhou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Fujian Longzhou.
Diversification Opportunities for Gome Telecom and Fujian Longzhou
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gome and Fujian is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Fujian Longzhou Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Longzhou Tran 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 Fujian Longzhou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Longzhou Tran has no effect on the direction of Gome Telecom i.e., Gome Telecom and Fujian Longzhou go up and down completely randomly.
Pair Corralation between Gome Telecom and Fujian Longzhou
Assuming the 90 days trading horizon Gome Telecom is expected to generate 1.63 times less return on investment than Fujian Longzhou. In addition to that, Gome Telecom is 1.05 times more volatile than Fujian Longzhou Transportation. It trades about 0.13 of its total potential returns per unit of risk. Fujian Longzhou Transportation is currently generating about 0.23 per unit of volatility. If you would invest 344.00 in Fujian Longzhou Transportation on September 2, 2024 and sell it today you would earn a total of 188.00 from holding Fujian Longzhou Transportation or generate 54.65% 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. Fujian Longzhou Transportation
Performance |
| Timeline |
| Gome Telecom Equipment |
| Fujian Longzhou Tran |
Gome Telecom and Fujian Longzhou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Fujian Longzhou
The main advantage of trading using opposite Gome Telecom and Fujian Longzhou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Fujian Longzhou 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 Fujian Longzhou will offset losses from the drop in Fujian Longzhou's long position.| Gome Telecom vs. Ming Yang Smart | Gome Telecom vs. 159681 | Gome Telecom vs. 159005 | Gome Telecom vs. Loctek Ergonomic Technology |
| Fujian Longzhou vs. Agricultural Bank of | Fujian Longzhou vs. Industrial and Commercial | Fujian Longzhou vs. Bank of China | Fujian Longzhou vs. China Construction Bank |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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