Correlation Between Gome Telecom and Xingguang Agricultural
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By analyzing existing cross correlation between Gome Telecom Equipment and Xingguang Agricultural Mach, you can compare the effects of market volatilities on Gome Telecom and Xingguang Agricultural 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 Xingguang Agricultural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Xingguang Agricultural.
Diversification Opportunities for Gome Telecom and Xingguang Agricultural
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gome and Xingguang is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Xingguang Agricultural Mach in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xingguang Agricultural 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 Xingguang Agricultural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xingguang Agricultural has no effect on the direction of Gome Telecom i.e., Gome Telecom and Xingguang Agricultural go up and down completely randomly.
Pair Corralation between Gome Telecom and Xingguang Agricultural
Assuming the 90 days trading horizon Gome Telecom Equipment is expected to under-perform the Xingguang Agricultural. But the stock apears to be less risky and, when comparing its historical volatility, Gome Telecom Equipment is 1.04 times less risky than Xingguang Agricultural. The stock trades about -0.06 of its potential returns per unit of risk. The Xingguang Agricultural Mach is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,020 in Xingguang Agricultural Mach on September 3, 2024 and sell it today you would lose (106.00) from holding Xingguang Agricultural Mach or give up 10.39% 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. Xingguang Agricultural Mach
Performance |
| Timeline |
| Gome Telecom Equipment |
| Xingguang Agricultural |
Gome Telecom and Xingguang Agricultural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Xingguang Agricultural
The main advantage of trading using opposite Gome Telecom and Xingguang Agricultural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Xingguang Agricultural 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 Xingguang Agricultural will offset losses from the drop in Xingguang Agricultural'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 |
| Xingguang Agricultural vs. Cultural Investment Holdings | Xingguang Agricultural vs. Gome Telecom Equipment | Xingguang Agricultural vs. Bus Online Co | Xingguang Agricultural 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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