Correlation Between Gome Telecom and Longmaster Information
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By analyzing existing cross correlation between Gome Telecom Equipment and Longmaster Information Tech, you can compare the effects of market volatilities on Gome Telecom and Longmaster Information 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 Longmaster Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Longmaster Information.
Diversification Opportunities for Gome Telecom and Longmaster Information
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gome and Longmaster is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Longmaster Information Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longmaster Information 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 Longmaster Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longmaster Information has no effect on the direction of Gome Telecom i.e., Gome Telecom and Longmaster Information go up and down completely randomly.
Pair Corralation between Gome Telecom and Longmaster Information
Assuming the 90 days trading horizon Gome Telecom Equipment is expected to under-perform the Longmaster Information. But the stock apears to be less risky and, when comparing its historical volatility, Gome Telecom Equipment is 1.33 times less risky than Longmaster Information. The stock trades about -0.01 of its potential returns per unit of risk. The Longmaster Information Tech is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,606 in Longmaster Information Tech on September 12, 2024 and sell it today you would earn a total of 301.00 from holding Longmaster Information Tech or generate 18.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gome Telecom Equipment vs. Longmaster Information Tech
Performance |
| Timeline |
| Gome Telecom Equipment |
| Longmaster Information |
Gome Telecom and Longmaster Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Longmaster Information
The main advantage of trading using opposite Gome Telecom and Longmaster Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Longmaster Information 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 Longmaster Information will offset losses from the drop in Longmaster Information's long position.| Gome Telecom vs. Lutian Machinery Co | Gome Telecom vs. PetroChina Co Ltd | Gome Telecom vs. Bank of China | Gome Telecom vs. Gansu Jiu Steel |
| Longmaster Information vs. Cultural Investment Holdings | Longmaster Information vs. Gome Telecom Equipment | Longmaster Information vs. Holitech Technology Co | Longmaster Information vs. Zotye Automobile 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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