Correlation Between Gome Telecom and Air China
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By analyzing existing cross correlation between Gome Telecom Equipment and Air China Ltd, you can compare the effects of market volatilities on Gome Telecom and Air China 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 Air China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Air China.
Diversification Opportunities for Gome Telecom and Air China
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gome and Air is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Air China Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air China 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 Air China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air China has no effect on the direction of Gome Telecom i.e., Gome Telecom and Air China go up and down completely randomly.
Pair Corralation between Gome Telecom and Air China
Assuming the 90 days trading horizon Gome Telecom Equipment is expected to generate 1.64 times more return on investment than Air China. However, Gome Telecom is 1.64 times more volatile than Air China Ltd. It trades about 0.13 of its potential returns per unit of risk. Air China Ltd is currently generating about 0.16 per unit of risk. If you would invest 148.00 in Gome Telecom Equipment on September 2, 2024 and sell it today you would earn a total of 42.00 from holding Gome Telecom Equipment or generate 28.38% 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. Air China Ltd
Performance |
| Timeline |
| Gome Telecom Equipment |
| Air China |
Gome Telecom and Air China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Air China
The main advantage of trading using opposite Gome Telecom and Air China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Air China 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 Air China will offset losses from the drop in Air China's long position.| Gome Telecom vs. Ming Yang Smart | Gome Telecom vs. 159681 | Gome Telecom vs. 159005 | Gome Telecom vs. Loctek Ergonomic Technology |
| Air China vs. China Life Insurance | Air China vs. Cinda Securities Co | Air China vs. Piotech Inc A | Air China vs. Dongxing Sec 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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