Correlation Between Gome Telecom and HUAQIN TECHNOLOGY
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By analyzing existing cross correlation between Gome Telecom Equipment and HUAQIN TECHNOLOGY LTD, you can compare the effects of market volatilities on Gome Telecom and HUAQIN TECHNOLOGY 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 HUAQIN TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and HUAQIN TECHNOLOGY.
Diversification Opportunities for Gome Telecom and HUAQIN TECHNOLOGY
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gome and HUAQIN is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and HUAQIN TECHNOLOGY LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUAQIN TECHNOLOGY LTD 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 HUAQIN TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUAQIN TECHNOLOGY LTD has no effect on the direction of Gome Telecom i.e., Gome Telecom and HUAQIN TECHNOLOGY go up and down completely randomly.
Pair Corralation between Gome Telecom and HUAQIN TECHNOLOGY
Assuming the 90 days trading horizon Gome Telecom Equipment is expected to under-perform the HUAQIN TECHNOLOGY. In addition to that, Gome Telecom is 1.24 times more volatile than HUAQIN TECHNOLOGY LTD. It trades about -0.04 of its total potential returns per unit of risk. HUAQIN TECHNOLOGY LTD is currently generating about 0.04 per unit of volatility. If you would invest 5,045 in HUAQIN TECHNOLOGY LTD on September 12, 2024 and sell it today you would earn a total of 1,286 from holding HUAQIN TECHNOLOGY LTD or generate 25.49% 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. HUAQIN TECHNOLOGY LTD
Performance |
| Timeline |
| Gome Telecom Equipment |
| HUAQIN TECHNOLOGY LTD |
Gome Telecom and HUAQIN TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and HUAQIN TECHNOLOGY
The main advantage of trading using opposite Gome Telecom and HUAQIN TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, HUAQIN TECHNOLOGY 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 HUAQIN TECHNOLOGY will offset losses from the drop in HUAQIN TECHNOLOGY's long position.| Gome Telecom vs. Lutian Machinery Co | Gome Telecom vs. PetroChina Co Ltd | Gome Telecom vs. Bank of China | Gome Telecom vs. Gansu Jiu Steel |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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