Correlation Between Gome Telecom and King Strong
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By analyzing existing cross correlation between Gome Telecom Equipment and King Strong New Material, you can compare the effects of market volatilities on Gome Telecom and King Strong 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 King Strong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and King Strong.
Diversification Opportunities for Gome Telecom and King Strong
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gome and King is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and King Strong New Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on King Strong New 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 King Strong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of King Strong New has no effect on the direction of Gome Telecom i.e., Gome Telecom and King Strong go up and down completely randomly.
Pair Corralation between Gome Telecom and King Strong
Assuming the 90 days trading horizon Gome Telecom Equipment is expected to under-perform the King Strong. In addition to that, Gome Telecom is 1.06 times more volatile than King Strong New Material. It trades about -0.06 of its total potential returns per unit of risk. King Strong New Material is currently generating about 0.02 per unit of volatility. If you would invest 2,123 in King Strong New Material on September 3, 2024 and sell it today you would earn a total of 257.00 from holding King Strong New Material or generate 12.11% 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. King Strong New Material
Performance |
| Timeline |
| Gome Telecom Equipment |
| King Strong New |
Gome Telecom and King Strong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and King Strong
The main advantage of trading using opposite Gome Telecom and King Strong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, King Strong 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 King Strong will offset losses from the drop in King Strong'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 |
| King Strong vs. Cultural Investment Holdings | King Strong vs. Gome Telecom Equipment | King Strong vs. Bus Online Co | King Strong vs. Holitech Technology 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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