Correlation Between Gome Telecom and Changshu Ruite
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By analyzing existing cross correlation between Gome Telecom Equipment and Changshu Ruite Electric, you can compare the effects of market volatilities on Gome Telecom and Changshu Ruite 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 Changshu Ruite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Changshu Ruite.
Diversification Opportunities for Gome Telecom and Changshu Ruite
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gome and Changshu is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Changshu Ruite Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changshu Ruite Electric 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 Changshu Ruite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changshu Ruite Electric has no effect on the direction of Gome Telecom i.e., Gome Telecom and Changshu Ruite go up and down completely randomly.
Pair Corralation between Gome Telecom and Changshu Ruite
Assuming the 90 days trading horizon Gome Telecom Equipment is expected to generate 1.08 times more return on investment than Changshu Ruite. However, Gome Telecom is 1.08 times more volatile than Changshu Ruite Electric. It trades about 0.07 of its potential returns per unit of risk. Changshu Ruite Electric is currently generating about 0.0 per unit of risk. If you would invest 143.00 in Gome Telecom Equipment on September 3, 2024 and sell it today you would earn a total of 47.00 from holding Gome Telecom Equipment or generate 32.87% 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. Changshu Ruite Electric
Performance |
| Timeline |
| Gome Telecom Equipment |
| Changshu Ruite Electric |
Gome Telecom and Changshu Ruite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Changshu Ruite
The main advantage of trading using opposite Gome Telecom and Changshu Ruite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Changshu Ruite 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 Changshu Ruite will offset losses from the drop in Changshu Ruite's long position.| Gome Telecom vs. PetroChina Co Ltd | Gome Telecom vs. China Mobile Limited | Gome Telecom vs. Industrial and Commercial | Gome Telecom vs. China Life Insurance |
| Changshu Ruite vs. Keda Clean Energy | Changshu Ruite vs. Juneyao Airlines | Changshu Ruite vs. Longjian Road Bridge | Changshu Ruite vs. Fujian Longzhou Transportation |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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