Correlation Between Gome Telecom and Western Mining
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By analyzing existing cross correlation between Gome Telecom Equipment and Western Mining Co, you can compare the effects of market volatilities on Gome Telecom and Western Mining 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 Western Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Western Mining.
Diversification Opportunities for Gome Telecom and Western Mining
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gome and Western is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Western Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Mining 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 Western Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Mining has no effect on the direction of Gome Telecom i.e., Gome Telecom and Western Mining go up and down completely randomly.
Pair Corralation between Gome Telecom and Western Mining
Assuming the 90 days trading horizon Gome Telecom Equipment is expected to under-perform the Western Mining. In addition to that, Gome Telecom is 1.62 times more volatile than Western Mining Co. It trades about -0.15 of its total potential returns per unit of risk. Western Mining Co is currently generating about 0.03 per unit of volatility. If you would invest 1,565 in Western Mining Co on November 28, 2024 and sell it today you would earn a total of 56.00 from holding Western Mining Co or generate 3.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gome Telecom Equipment vs. Western Mining Co
Performance |
| Timeline |
| Gome Telecom Equipment |
| Western Mining |
Gome Telecom and Western Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Western Mining
The main advantage of trading using opposite Gome Telecom and Western Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Western Mining 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 Western Mining will offset losses from the drop in Western Mining's long position.| Gome Telecom vs. Highbroad Advanced Material | Gome Telecom vs. Zhejiang Daily Media | Gome Telecom vs. NBTM New Materials | Gome Telecom vs. Anhui Xinhua Media |
| Western Mining vs. Chongqing Changan Automobile | Western Mining vs. Ningbo Fangzheng Automobile | Western Mining vs. Zhejiang Construction Investment | Western Mining vs. Tianjin Hi Tech Development |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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