Correlation Between Gome Telecom and Jiangsu Xinning
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By analyzing existing cross correlation between Gome Telecom Equipment and Jiangsu Xinning Modern, you can compare the effects of market volatilities on Gome Telecom and Jiangsu Xinning 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 Jiangsu Xinning. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Jiangsu Xinning.
Diversification Opportunities for Gome Telecom and Jiangsu Xinning
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gome and Jiangsu is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Jiangsu Xinning Modern in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Xinning Modern 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 Jiangsu Xinning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Xinning Modern has no effect on the direction of Gome Telecom i.e., Gome Telecom and Jiangsu Xinning go up and down completely randomly.
Pair Corralation between Gome Telecom and Jiangsu Xinning
Assuming the 90 days trading horizon Gome Telecom is expected to generate 3.79 times less return on investment than Jiangsu Xinning. But when comparing it to its historical volatility, Gome Telecom Equipment is 1.23 times less risky than Jiangsu Xinning. It trades about 0.08 of its potential returns per unit of risk. Jiangsu Xinning Modern is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 268.00 in Jiangsu Xinning Modern on August 30, 2024 and sell it today you would earn a total of 129.00 from holding Jiangsu Xinning Modern or generate 48.13% 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. Jiangsu Xinning Modern
Performance |
| Timeline |
| Gome Telecom Equipment |
| Jiangsu Xinning Modern |
Gome Telecom and Jiangsu Xinning Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Jiangsu Xinning
The main advantage of trading using opposite Gome Telecom and Jiangsu Xinning positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Jiangsu Xinning 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 Jiangsu Xinning will offset losses from the drop in Jiangsu Xinning'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 |
| Jiangsu Xinning vs. Jiaozuo Wanfang Aluminum | Jiangsu Xinning vs. Sinosteel Luonai Materials | Jiangsu Xinning vs. Beijing Jiaman Dress | Jiangsu Xinning vs. Ye Chiu Metal |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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