Correlation Between Gome Telecom and Chinese Universe
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By analyzing existing cross correlation between Gome Telecom Equipment and Chinese Universe Publishing, you can compare the effects of market volatilities on Gome Telecom and Chinese Universe 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 Chinese Universe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Chinese Universe.
Diversification Opportunities for Gome Telecom and Chinese Universe
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gome and Chinese is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Chinese Universe Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chinese Universe Pub 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 Chinese Universe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chinese Universe Pub has no effect on the direction of Gome Telecom i.e., Gome Telecom and Chinese Universe go up and down completely randomly.
Pair Corralation between Gome Telecom and Chinese Universe
Assuming the 90 days trading horizon Gome Telecom Equipment is expected to under-perform the Chinese Universe. In addition to that, Gome Telecom is 1.08 times more volatile than Chinese Universe Publishing. It trades about -0.12 of its total potential returns per unit of risk. Chinese Universe Publishing is currently generating about 0.03 per unit of volatility. If you would invest 961.00 in Chinese Universe Publishing on November 5, 2024 and sell it today you would earn a total of 237.00 from holding Chinese Universe Publishing or generate 24.66% 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. Chinese Universe Publishing
Performance |
| Timeline |
| Gome Telecom Equipment |
| Chinese Universe Pub |
Gome Telecom and Chinese Universe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Chinese Universe
The main advantage of trading using opposite Gome Telecom and Chinese Universe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Chinese Universe 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 Chinese Universe will offset losses from the drop in Chinese Universe'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 |
| Chinese Universe vs. China Sports Industry | Chinese Universe vs. Agricultural Bank of | Chinese Universe vs. China Everbright Bank | Chinese Universe vs. Heilongjiang Transport Development |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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