Correlation Between Gome Telecom and Shenzhen Zhongzhuang
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By analyzing existing cross correlation between Gome Telecom Equipment and Shenzhen Zhongzhuang Construction, you can compare the effects of market volatilities on Gome Telecom and Shenzhen Zhongzhuang 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 Shenzhen Zhongzhuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Shenzhen Zhongzhuang.
Diversification Opportunities for Gome Telecom and Shenzhen Zhongzhuang
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gome and Shenzhen is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Shenzhen Zhongzhuang Construct in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Zhongzhuang 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 Shenzhen Zhongzhuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Zhongzhuang has no effect on the direction of Gome Telecom i.e., Gome Telecom and Shenzhen Zhongzhuang go up and down completely randomly.
Pair Corralation between Gome Telecom and Shenzhen Zhongzhuang
Assuming the 90 days trading horizon Gome Telecom Equipment is expected to under-perform the Shenzhen Zhongzhuang. But the stock apears to be less risky and, when comparing its historical volatility, Gome Telecom Equipment is 1.01 times less risky than Shenzhen Zhongzhuang. The stock trades about -0.05 of its potential returns per unit of risk. The Shenzhen Zhongzhuang Construction is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 462.00 in Shenzhen Zhongzhuang Construction on August 31, 2024 and sell it today you would lose (51.00) from holding Shenzhen Zhongzhuang Construction or give up 11.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gome Telecom Equipment vs. Shenzhen Zhongzhuang Construct
Performance |
| Timeline |
| Gome Telecom Equipment |
| Shenzhen Zhongzhuang |
Gome Telecom and Shenzhen Zhongzhuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Shenzhen Zhongzhuang
The main advantage of trading using opposite Gome Telecom and Shenzhen Zhongzhuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Shenzhen Zhongzhuang 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 Shenzhen Zhongzhuang will offset losses from the drop in Shenzhen Zhongzhuang'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 |
| Shenzhen Zhongzhuang vs. Cultural Investment Holdings | Shenzhen Zhongzhuang vs. Gome Telecom Equipment | Shenzhen Zhongzhuang vs. Bus Online Co | Shenzhen Zhongzhuang 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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