Correlation Between Gome Telecom and Nuode Investment
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By analyzing existing cross correlation between Gome Telecom Equipment and Nuode Investment Co, you can compare the effects of market volatilities on Gome Telecom and Nuode Investment 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 Nuode Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Nuode Investment.
Diversification Opportunities for Gome Telecom and Nuode Investment
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gome and Nuode is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Nuode Investment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuode Investment 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 Nuode Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuode Investment has no effect on the direction of Gome Telecom i.e., Gome Telecom and Nuode Investment go up and down completely randomly.
Pair Corralation between Gome Telecom and Nuode Investment
Assuming the 90 days trading horizon Gome Telecom is expected to generate 15.87 times less return on investment than Nuode Investment. But when comparing it to its historical volatility, Gome Telecom Equipment is 1.22 times less risky than Nuode Investment. It trades about 0.01 of its potential returns per unit of risk. Nuode Investment Co is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 388.00 in Nuode Investment Co on August 31, 2024 and sell it today you would earn a total of 71.00 from holding Nuode Investment Co or generate 18.3% 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. Nuode Investment Co
Performance |
| Timeline |
| Gome Telecom Equipment |
| Nuode Investment |
Gome Telecom and Nuode Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Nuode Investment
The main advantage of trading using opposite Gome Telecom and Nuode Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Nuode Investment 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 Nuode Investment will offset losses from the drop in Nuode Investment's long position.| Gome Telecom vs. China State Construction | Gome Telecom vs. China Merchants Shekou | Gome Telecom vs. Huafa Industrial Co | Gome Telecom vs. China International Capital |
| Nuode Investment vs. Cultural Investment Holdings | Nuode Investment vs. Gome Telecom Equipment | Nuode Investment vs. Bus Online Co | Nuode Investment 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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