Correlation Between Gome Telecom and Beijing Wandong
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By analyzing existing cross correlation between Gome Telecom Equipment and Beijing Wandong Medical, you can compare the effects of market volatilities on Gome Telecom and Beijing Wandong 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 Beijing Wandong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Beijing Wandong.
Diversification Opportunities for Gome Telecom and Beijing Wandong
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gome and Beijing is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Beijing Wandong Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Wandong Medical 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 Beijing Wandong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Wandong Medical has no effect on the direction of Gome Telecom i.e., Gome Telecom and Beijing Wandong go up and down completely randomly.
Pair Corralation between Gome Telecom and Beijing Wandong
Assuming the 90 days trading horizon Gome Telecom Equipment is expected to under-perform the Beijing Wandong. In addition to that, Gome Telecom is 1.46 times more volatile than Beijing Wandong Medical. It trades about -0.05 of its total potential returns per unit of risk. Beijing Wandong Medical is currently generating about 0.0 per unit of volatility. If you would invest 1,954 in Beijing Wandong Medical on September 13, 2024 and sell it today you would lose (215.00) from holding Beijing Wandong Medical or give up 11.0% 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. Beijing Wandong Medical
Performance |
| Timeline |
| Gome Telecom Equipment |
| Beijing Wandong Medical |
Gome Telecom and Beijing Wandong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Beijing Wandong
The main advantage of trading using opposite Gome Telecom and Beijing Wandong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Beijing Wandong 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 Beijing Wandong will offset losses from the drop in Beijing Wandong'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 |
| Beijing Wandong vs. Industrial and Commercial | Beijing Wandong vs. Kweichow Moutai Co | Beijing Wandong vs. Agricultural Bank of | Beijing Wandong vs. China Mobile Limited |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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