Correlation Between Gome Telecom and Fujian Oriental
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By analyzing existing cross correlation between Gome Telecom Equipment and Fujian Oriental Silver, you can compare the effects of market volatilities on Gome Telecom and Fujian Oriental 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 Fujian Oriental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Fujian Oriental.
Diversification Opportunities for Gome Telecom and Fujian Oriental
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gome and Fujian is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Fujian Oriental Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Oriental Silver 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 Fujian Oriental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Oriental Silver has no effect on the direction of Gome Telecom i.e., Gome Telecom and Fujian Oriental go up and down completely randomly.
Pair Corralation between Gome Telecom and Fujian Oriental
Assuming the 90 days trading horizon Gome Telecom Equipment is expected to under-perform the Fujian Oriental. But the stock apears to be less risky and, when comparing its historical volatility, Gome Telecom Equipment is 1.12 times less risky than Fujian Oriental. The stock trades about -0.12 of its potential returns per unit of risk. The Fujian Oriental Silver is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,383 in Fujian Oriental Silver on October 13, 2024 and sell it today you would lose (805.00) from holding Fujian Oriental Silver or give up 58.21% 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. Fujian Oriental Silver
Performance |
| Timeline |
| Gome Telecom Equipment |
| Fujian Oriental Silver |
Gome Telecom and Fujian Oriental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Fujian Oriental
The main advantage of trading using opposite Gome Telecom and Fujian Oriental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Fujian Oriental 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 Fujian Oriental will offset losses from the drop in Fujian Oriental's long position.| Gome Telecom vs. Jiangsu Xinri E Vehicle | Gome Telecom vs. Maxvision Technology Corp | Gome Telecom vs. Iat Automobile Technology | Gome Telecom vs. Keeson Technology Corp |
| Fujian Oriental vs. Dalian Thermal Power | Fujian Oriental vs. Jiahe Foods Industry | Fujian Oriental vs. Rising Nonferrous Metals | Fujian Oriental vs. Anhui Tongguan Copper |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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