Correlation Between Gome Telecom and Guodian Nanjing
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By analyzing existing cross correlation between Gome Telecom Equipment and Guodian Nanjing Automation, you can compare the effects of market volatilities on Gome Telecom and Guodian Nanjing 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 Guodian Nanjing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Guodian Nanjing.
Diversification Opportunities for Gome Telecom and Guodian Nanjing
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gome and Guodian is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Guodian Nanjing Automation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guodian Nanjing Auto 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 Guodian Nanjing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guodian Nanjing Auto has no effect on the direction of Gome Telecom i.e., Gome Telecom and Guodian Nanjing go up and down completely randomly.
Pair Corralation between Gome Telecom and Guodian Nanjing
Assuming the 90 days trading horizon Gome Telecom Equipment is expected to under-perform the Guodian Nanjing. In addition to that, Gome Telecom is 1.08 times more volatile than Guodian Nanjing Automation. It trades about -0.66 of its total potential returns per unit of risk. Guodian Nanjing Automation is currently generating about 0.24 per unit of volatility. If you would invest 653.00 in Guodian Nanjing Automation on November 2, 2024 and sell it today you would earn a total of 66.00 from holding Guodian Nanjing Automation or generate 10.11% 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. Guodian Nanjing Automation
Performance |
| Timeline |
| Gome Telecom Equipment |
| Guodian Nanjing Auto |
Gome Telecom and Guodian Nanjing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Guodian Nanjing
The main advantage of trading using opposite Gome Telecom and Guodian Nanjing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Guodian Nanjing 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 Guodian Nanjing will offset losses from the drop in Guodian Nanjing's long position.| Gome Telecom vs. Hainan Haiqi Transportation | Gome Telecom vs. Harbin Hatou Investment | Gome Telecom vs. Dazhong Transportation Group | Gome Telecom vs. Fujian Longzhou Transportation |
| Guodian Nanjing vs. Vontron Technology Co | Guodian Nanjing vs. Hainan Mining Co | Guodian Nanjing vs. Ningbo Fujia Industrial | Guodian Nanjing vs. Guangzhou Seagull Kitchen |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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