Correlation Between Gome Telecom and Kangyue Technology
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By analyzing existing cross correlation between Gome Telecom Equipment and Kangyue Technology Co, you can compare the effects of market volatilities on Gome Telecom and Kangyue Technology 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 Kangyue Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Kangyue Technology.
Diversification Opportunities for Gome Telecom and Kangyue Technology
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gome and Kangyue is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Kangyue Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kangyue Technology 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 Kangyue Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kangyue Technology has no effect on the direction of Gome Telecom i.e., Gome Telecom and Kangyue Technology go up and down completely randomly.
Pair Corralation between Gome Telecom and Kangyue Technology
Assuming the 90 days trading horizon Gome Telecom Equipment is expected to under-perform the Kangyue Technology. But the stock apears to be less risky and, when comparing its historical volatility, Gome Telecom Equipment is 1.58 times less risky than Kangyue Technology. The stock trades about -0.05 of its potential returns per unit of risk. The Kangyue Technology Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,035 in Kangyue Technology Co on September 13, 2024 and sell it today you would lose (346.00) from holding Kangyue Technology Co or give up 33.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gome Telecom Equipment vs. Kangyue Technology Co
Performance |
| Timeline |
| Gome Telecom Equipment |
| Kangyue Technology |
Gome Telecom and Kangyue Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Kangyue Technology
The main advantage of trading using opposite Gome Telecom and Kangyue Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Kangyue Technology 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 Kangyue Technology will offset losses from the drop in Kangyue Technology's long position.| Gome Telecom vs. Industrial and Commercial | Gome Telecom vs. Agricultural Bank of | Gome Telecom vs. China Construction Bank | Gome Telecom vs. Bank of China |
| Kangyue Technology vs. Cultural Investment Holdings | Kangyue Technology vs. Gome Telecom Equipment | Kangyue Technology vs. Holitech Technology Co | Kangyue Technology 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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