Correlation Between Gome Telecom and Dirui Industrial
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By analyzing existing cross correlation between Gome Telecom Equipment and Dirui Industrial Co, you can compare the effects of market volatilities on Gome Telecom and Dirui Industrial 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 Dirui Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Dirui Industrial.
Diversification Opportunities for Gome Telecom and Dirui Industrial
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Gome and Dirui is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Dirui Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dirui Industrial 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 Dirui Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dirui Industrial has no effect on the direction of Gome Telecom i.e., Gome Telecom and Dirui Industrial go up and down completely randomly.
Pair Corralation between Gome Telecom and Dirui Industrial
Assuming the 90 days trading horizon Gome Telecom is expected to generate 10.15 times less return on investment than Dirui Industrial. But when comparing it to its historical volatility, Gome Telecom Equipment is 1.21 times less risky than Dirui Industrial. It trades about 0.01 of its potential returns per unit of risk. Dirui Industrial Co is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,336 in Dirui Industrial Co on September 12, 2024 and sell it today you would earn a total of 382.00 from holding Dirui Industrial Co or generate 28.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gome Telecom Equipment vs. Dirui Industrial Co
Performance |
| Timeline |
| Gome Telecom Equipment |
| Dirui Industrial |
Gome Telecom and Dirui Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Dirui Industrial
The main advantage of trading using opposite Gome Telecom and Dirui Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Dirui Industrial 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 Dirui Industrial will offset losses from the drop in Dirui Industrial'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 |
| Dirui Industrial vs. Anhui Huilong Agricultural | Dirui Industrial vs. Sportsoul Co Ltd | Dirui Industrial vs. Sinomach General Machinery | Dirui Industrial vs. Lander Sports Development |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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