Correlation Between Gome Telecom and Hefei Metalforming
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By analyzing existing cross correlation between Gome Telecom Equipment and Hefei Metalforming Mach, you can compare the effects of market volatilities on Gome Telecom and Hefei Metalforming 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 Hefei Metalforming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Hefei Metalforming.
Diversification Opportunities for Gome Telecom and Hefei Metalforming
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gome and Hefei is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Hefei Metalforming Mach in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hefei Metalforming Mach 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 Hefei Metalforming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hefei Metalforming Mach has no effect on the direction of Gome Telecom i.e., Gome Telecom and Hefei Metalforming go up and down completely randomly.
Pair Corralation between Gome Telecom and Hefei Metalforming
Assuming the 90 days trading horizon Gome Telecom Equipment is expected to under-perform the Hefei Metalforming. In addition to that, Gome Telecom is 1.01 times more volatile than Hefei Metalforming Mach. It trades about -0.06 of its total potential returns per unit of risk. Hefei Metalforming Mach is currently generating about 0.01 per unit of volatility. If you would invest 865.00 in Hefei Metalforming Mach on September 3, 2024 and sell it today you would lose (86.00) from holding Hefei Metalforming Mach or give up 9.94% 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. Hefei Metalforming Mach
Performance |
| Timeline |
| Gome Telecom Equipment |
| Hefei Metalforming Mach |
Gome Telecom and Hefei Metalforming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Hefei Metalforming
The main advantage of trading using opposite Gome Telecom and Hefei Metalforming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Hefei Metalforming 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 Hefei Metalforming will offset losses from the drop in Hefei Metalforming'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 |
| Hefei Metalforming vs. Cultural Investment Holdings | Hefei Metalforming vs. Gome Telecom Equipment | Hefei Metalforming vs. Bus Online Co | Hefei Metalforming 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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