Correlation Between Gome Telecom and Shanghai Xinhua
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By analyzing existing cross correlation between Gome Telecom Equipment and Shanghai Xinhua Media, you can compare the effects of market volatilities on Gome Telecom and Shanghai Xinhua 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 Shanghai Xinhua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Shanghai Xinhua.
Diversification Opportunities for Gome Telecom and Shanghai Xinhua
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gome and Shanghai is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Shanghai Xinhua Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Xinhua Media 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 Shanghai Xinhua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Xinhua Media has no effect on the direction of Gome Telecom i.e., Gome Telecom and Shanghai Xinhua go up and down completely randomly.
Pair Corralation between Gome Telecom and Shanghai Xinhua
Assuming the 90 days trading horizon Gome Telecom Equipment is expected to under-perform the Shanghai Xinhua. But the stock apears to be less risky and, when comparing its historical volatility, Gome Telecom Equipment is 1.12 times less risky than Shanghai Xinhua. The stock trades about -0.07 of its potential returns per unit of risk. The Shanghai Xinhua Media is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 384.00 in Shanghai Xinhua Media on October 26, 2024 and sell it today you would earn a total of 213.00 from holding Shanghai Xinhua Media or generate 55.47% 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. Shanghai Xinhua Media
Performance |
| Timeline |
| Gome Telecom Equipment |
| Shanghai Xinhua Media |
Gome Telecom and Shanghai Xinhua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Shanghai Xinhua
The main advantage of trading using opposite Gome Telecom and Shanghai Xinhua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Shanghai Xinhua 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 Shanghai Xinhua will offset losses from the drop in Shanghai Xinhua's long position.| Gome Telecom vs. Chison Medical Technologies | Gome Telecom vs. Chinese Universe Publishing | Gome Telecom vs. Touchstone International Medical | Gome Telecom vs. Jiangsu Phoenix Publishing |
| Shanghai Xinhua vs. Bus Online Co | Shanghai Xinhua vs. Holitech Technology Co | Shanghai Xinhua vs. Gome Telecom Equipment | Shanghai Xinhua vs. Cultural Investment Holdings |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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