Correlation Between Gome Telecom and Penghua Shenzhen
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By analyzing existing cross correlation between Gome Telecom Equipment and Penghua Shenzhen Energy, you can compare the effects of market volatilities on Gome Telecom and Penghua Shenzhen 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 Penghua Shenzhen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Penghua Shenzhen.
Diversification Opportunities for Gome Telecom and Penghua Shenzhen
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gome and Penghua is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Penghua Shenzhen Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penghua Shenzhen Energy 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 Penghua Shenzhen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penghua Shenzhen Energy has no effect on the direction of Gome Telecom i.e., Gome Telecom and Penghua Shenzhen go up and down completely randomly.
Pair Corralation between Gome Telecom and Penghua Shenzhen
Assuming the 90 days trading horizon Gome Telecom Equipment is expected to generate 4.55 times more return on investment than Penghua Shenzhen. However, Gome Telecom is 4.55 times more volatile than Penghua Shenzhen Energy. It trades about 0.03 of its potential returns per unit of risk. Penghua Shenzhen Energy is currently generating about 0.08 per unit of risk. If you would invest 175.00 in Gome Telecom Equipment on August 29, 2024 and sell it today you would earn a total of 19.00 from holding Gome Telecom Equipment or generate 10.86% 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. Penghua Shenzhen Energy
Performance |
| Timeline |
| Gome Telecom Equipment |
| Penghua Shenzhen Energy |
Gome Telecom and Penghua Shenzhen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Penghua Shenzhen
The main advantage of trading using opposite Gome Telecom and Penghua Shenzhen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Penghua Shenzhen 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 Penghua Shenzhen will offset losses from the drop in Penghua Shenzhen's long position.| Gome Telecom vs. Agricultural Bank of | Gome Telecom vs. Industrial and Commercial | Gome Telecom vs. Bank of China | Gome Telecom vs. China Construction Bank |
| Penghua Shenzhen vs. Zhongtong Guomai Communication | Penghua Shenzhen vs. Bus Online Co | Penghua Shenzhen vs. Guangzhou Dongfang Hotel | Penghua Shenzhen vs. Eastern Communications 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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