Correlation Between Gome Telecom and Wuhan Yangtze
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By analyzing existing cross correlation between Gome Telecom Equipment and Wuhan Yangtze Communication, you can compare the effects of market volatilities on Gome Telecom and Wuhan Yangtze 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 Wuhan Yangtze. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Wuhan Yangtze.
Diversification Opportunities for Gome Telecom and Wuhan Yangtze
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gome and Wuhan is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Wuhan Yangtze Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuhan Yangtze Commun 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 Wuhan Yangtze. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuhan Yangtze Commun has no effect on the direction of Gome Telecom i.e., Gome Telecom and Wuhan Yangtze go up and down completely randomly.
Pair Corralation between Gome Telecom and Wuhan Yangtze
Assuming the 90 days trading horizon Gome Telecom Equipment is expected to under-perform the Wuhan Yangtze. But the stock apears to be less risky and, when comparing its historical volatility, Gome Telecom Equipment is 1.6 times less risky than Wuhan Yangtze. The stock trades about -0.54 of its potential returns per unit of risk. The Wuhan Yangtze Communication is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,096 in Wuhan Yangtze Communication on November 5, 2024 and sell it today you would earn a total of 197.00 from holding Wuhan Yangtze Communication or generate 9.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gome Telecom Equipment vs. Wuhan Yangtze Communication
Performance |
| Timeline |
| Gome Telecom Equipment |
| Wuhan Yangtze Commun |
Gome Telecom and Wuhan Yangtze Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Wuhan Yangtze
The main advantage of trading using opposite Gome Telecom and Wuhan Yangtze positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Wuhan Yangtze 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 Wuhan Yangtze will offset losses from the drop in Wuhan Yangtze's long position.| Gome Telecom vs. Bengang Steel Plates | Gome Telecom vs. Penyao Environmental Protection | Gome Telecom vs. Guangdong Transtek Medical | Gome Telecom vs. Fangda Special Steel |
| Wuhan Yangtze vs. Eastern Communications Co | Wuhan Yangtze vs. Jiangsu Jinling Sports | Wuhan Yangtze vs. Everdisplay Optronics Shanghai | Wuhan Yangtze vs. Beijing Bewinner Communications |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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