Correlation Between Gome Telecom and Tengda Construction
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By analyzing existing cross correlation between Gome Telecom Equipment and Tengda Construction Group, you can compare the effects of market volatilities on Gome Telecom and Tengda Construction 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 Tengda Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Tengda Construction.
Diversification Opportunities for Gome Telecom and Tengda Construction
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gome and Tengda is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Tengda Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tengda Construction 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 Tengda Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tengda Construction has no effect on the direction of Gome Telecom i.e., Gome Telecom and Tengda Construction go up and down completely randomly.
Pair Corralation between Gome Telecom and Tengda Construction
Assuming the 90 days trading horizon Gome Telecom Equipment is expected to under-perform the Tengda Construction. In addition to that, Gome Telecom is 1.85 times more volatile than Tengda Construction Group. It trades about -0.05 of its total potential returns per unit of risk. Tengda Construction Group is currently generating about -0.02 per unit of volatility. If you would invest 294.00 in Tengda Construction Group on August 31, 2024 and sell it today you would lose (48.00) from holding Tengda Construction Group or give up 16.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gome Telecom Equipment vs. Tengda Construction Group
Performance |
| Timeline |
| Gome Telecom Equipment |
| Tengda Construction |
Gome Telecom and Tengda Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Tengda Construction
The main advantage of trading using opposite Gome Telecom and Tengda Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Tengda Construction 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 Tengda Construction will offset losses from the drop in Tengda Construction'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 |
| Tengda Construction vs. Cultural Investment Holdings | Tengda Construction vs. Gome Telecom Equipment | Tengda Construction vs. Bus Online Co | Tengda Construction 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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