Correlation Between Gome Telecom and Nanjing Putian
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By analyzing existing cross correlation between Gome Telecom Equipment and Nanjing Putian Telecommunications, you can compare the effects of market volatilities on Gome Telecom and Nanjing Putian 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 Nanjing Putian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Nanjing Putian.
Diversification Opportunities for Gome Telecom and Nanjing Putian
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gome and Nanjing is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Nanjing Putian Telecommunicati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanjing Putian Telec 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 Nanjing Putian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanjing Putian Telec has no effect on the direction of Gome Telecom i.e., Gome Telecom and Nanjing Putian go up and down completely randomly.
Pair Corralation between Gome Telecom and Nanjing Putian
Assuming the 90 days trading horizon Gome Telecom is expected to generate 5.89 times less return on investment than Nanjing Putian. But when comparing it to its historical volatility, Gome Telecom Equipment is 1.19 times less risky than Nanjing Putian. It trades about 0.08 of its potential returns per unit of risk. Nanjing Putian Telecommunications is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 242.00 in Nanjing Putian Telecommunications on August 30, 2024 and sell it today you would earn a total of 215.00 from holding Nanjing Putian Telecommunications or generate 88.84% 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. Nanjing Putian Telecommunicati
Performance |
| Timeline |
| Gome Telecom Equipment |
| Nanjing Putian Telec |
Gome Telecom and Nanjing Putian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Nanjing Putian
The main advantage of trading using opposite Gome Telecom and Nanjing Putian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Nanjing Putian 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 Nanjing Putian will offset losses from the drop in Nanjing Putian's long position.| Gome Telecom vs. 360 Security Technology | Gome Telecom vs. China Asset Management | Gome Telecom vs. Vontron Technology Co | Gome Telecom vs. China Life Insurance |
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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