Correlation Between Gome Telecom and Changchun Faway
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By analyzing existing cross correlation between Gome Telecom Equipment and Changchun Faway Automobile, you can compare the effects of market volatilities on Gome Telecom and Changchun Faway 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 Changchun Faway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Changchun Faway.
Diversification Opportunities for Gome Telecom and Changchun Faway
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gome and Changchun is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Changchun Faway Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changchun Faway 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 Changchun Faway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changchun Faway Auto has no effect on the direction of Gome Telecom i.e., Gome Telecom and Changchun Faway go up and down completely randomly.
Pair Corralation between Gome Telecom and Changchun Faway
Assuming the 90 days trading horizon Gome Telecom Equipment is expected to under-perform the Changchun Faway. In addition to that, Gome Telecom is 1.68 times more volatile than Changchun Faway Automobile. It trades about -0.03 of its total potential returns per unit of risk. Changchun Faway Automobile is currently generating about 0.0 per unit of volatility. If you would invest 1,035 in Changchun Faway Automobile on September 4, 2024 and sell it today you would lose (80.00) from holding Changchun Faway Automobile or give up 7.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gome Telecom Equipment vs. Changchun Faway Automobile
Performance |
| Timeline |
| Gome Telecom Equipment |
| Changchun Faway Auto |
Gome Telecom and Changchun Faway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Changchun Faway
The main advantage of trading using opposite Gome Telecom and Changchun Faway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Changchun Faway 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 Changchun Faway will offset losses from the drop in Changchun Faway's long position.| Gome Telecom vs. Biwin Storage Technology | Gome Telecom vs. PetroChina Co Ltd | Gome Telecom vs. Industrial and Commercial | Gome Telecom vs. China Construction Bank |
| Changchun Faway vs. Cultural Investment Holdings | Changchun Faway vs. Gome Telecom Equipment | Changchun Faway vs. Bus Online Co | Changchun Faway 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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