Correlation Between Gome Telecom and Runjian Communication
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By analyzing existing cross correlation between Gome Telecom Equipment and Runjian Communication Co, you can compare the effects of market volatilities on Gome Telecom and Runjian Communication 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 Runjian Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Runjian Communication.
Diversification Opportunities for Gome Telecom and Runjian Communication
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gome and Runjian is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Runjian Communication Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Runjian Communication 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 Runjian Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Runjian Communication has no effect on the direction of Gome Telecom i.e., Gome Telecom and Runjian Communication go up and down completely randomly.
Pair Corralation between Gome Telecom and Runjian Communication
Assuming the 90 days trading horizon Gome Telecom Equipment is expected to under-perform the Runjian Communication. But the stock apears to be less risky and, when comparing its historical volatility, Gome Telecom Equipment is 1.09 times less risky than Runjian Communication. The stock trades about -0.66 of its potential returns per unit of risk. The Runjian Communication Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,152 in Runjian Communication Co on November 3, 2024 and sell it today you would earn a total of 60.00 from holding Runjian Communication Co or generate 1.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gome Telecom Equipment vs. Runjian Communication Co
Performance |
| Timeline |
| Gome Telecom Equipment |
| Runjian Communication |
Gome Telecom and Runjian Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Runjian Communication
The main advantage of trading using opposite Gome Telecom and Runjian Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Runjian Communication 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 Runjian Communication will offset losses from the drop in Runjian Communication's long position.| Gome Telecom vs. Will Semiconductor Co | Gome Telecom vs. Caihong Display Devices | Gome Telecom vs. Yuanjie Semiconductor Technology | Gome Telecom vs. CIMC Vehicles Co |
| Runjian Communication vs. Harbin Air Conditioning | Runjian Communication vs. Jiangsu Xinri E Vehicle | Runjian Communication vs. Air China Ltd | Runjian Communication vs. BTG Hotels Group |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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