Correlation Between Gome Telecom and Gem Year
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By analyzing existing cross correlation between Gome Telecom Equipment and Gem Year Industrial Co, you can compare the effects of market volatilities on Gome Telecom and Gem Year 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 Gem Year. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Gem Year.
Diversification Opportunities for Gome Telecom and Gem Year
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gome and Gem is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Gem Year Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gem Year Industrial 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 Gem Year. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gem Year Industrial has no effect on the direction of Gome Telecom i.e., Gome Telecom and Gem Year go up and down completely randomly.
Pair Corralation between Gome Telecom and Gem Year
Assuming the 90 days trading horizon Gome Telecom Equipment is expected to under-perform the Gem Year. In addition to that, Gome Telecom is 1.49 times more volatile than Gem Year Industrial Co. It trades about -0.06 of its total potential returns per unit of risk. Gem Year Industrial Co is currently generating about 0.0 per unit of volatility. If you would invest 475.00 in Gem Year Industrial Co on September 3, 2024 and sell it today you would lose (31.00) from holding Gem Year Industrial Co or give up 6.53% 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. Gem Year Industrial Co
Performance |
| Timeline |
| Gome Telecom Equipment |
| Gem Year Industrial |
Gome Telecom and Gem Year Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Gem Year
The main advantage of trading using opposite Gome Telecom and Gem Year positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Gem Year 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 Gem Year will offset losses from the drop in Gem Year's long position.| Gome Telecom vs. PetroChina Co Ltd | Gome Telecom vs. China Mobile Limited | Gome Telecom vs. Industrial and Commercial | Gome Telecom vs. China Life Insurance |
| Gem Year vs. Cultural Investment Holdings | Gem Year vs. Gome Telecom Equipment | Gem Year vs. Bus Online Co | Gem Year 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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