Correlation Between Gome Telecom and Jinhe Biotechnology
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By analyzing existing cross correlation between Gome Telecom Equipment and Jinhe Biotechnology Co, you can compare the effects of market volatilities on Gome Telecom and Jinhe Biotechnology 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 Jinhe Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Jinhe Biotechnology.
Diversification Opportunities for Gome Telecom and Jinhe Biotechnology
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gome and Jinhe is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Jinhe Biotechnology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinhe Biotechnology 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 Jinhe Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinhe Biotechnology has no effect on the direction of Gome Telecom i.e., Gome Telecom and Jinhe Biotechnology go up and down completely randomly.
Pair Corralation between Gome Telecom and Jinhe Biotechnology
Assuming the 90 days trading horizon Gome Telecom Equipment is expected to under-perform the Jinhe Biotechnology. In addition to that, Gome Telecom is 1.8 times more volatile than Jinhe Biotechnology Co. It trades about -0.01 of its total potential returns per unit of risk. Jinhe Biotechnology Co is currently generating about 0.06 per unit of volatility. If you would invest 456.00 in Jinhe Biotechnology Co on September 12, 2024 and sell it today you would earn a total of 9.00 from holding Jinhe Biotechnology Co or generate 1.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gome Telecom Equipment vs. Jinhe Biotechnology Co
Performance |
| Timeline |
| Gome Telecom Equipment |
| Jinhe Biotechnology |
Gome Telecom and Jinhe Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Jinhe Biotechnology
The main advantage of trading using opposite Gome Telecom and Jinhe Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Jinhe Biotechnology 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 Jinhe Biotechnology will offset losses from the drop in Jinhe Biotechnology's long position.| Gome Telecom vs. Lutian Machinery Co | Gome Telecom vs. PetroChina Co Ltd | Gome Telecom vs. Bank of China | Gome Telecom vs. Gansu Jiu Steel |
| Jinhe Biotechnology vs. Cultural Investment Holdings | Jinhe Biotechnology vs. Gome Telecom Equipment | Jinhe Biotechnology vs. Holitech Technology Co | Jinhe Biotechnology vs. Zotye Automobile 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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