Correlation Between Gome Telecom and Zhengping RoadBridge
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By analyzing existing cross correlation between Gome Telecom Equipment and Zhengping RoadBridge Constr, you can compare the effects of market volatilities on Gome Telecom and Zhengping RoadBridge 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 Zhengping RoadBridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Zhengping RoadBridge.
Diversification Opportunities for Gome Telecom and Zhengping RoadBridge
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gome and Zhengping is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Zhengping RoadBridge Constr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhengping RoadBridge 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 Zhengping RoadBridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhengping RoadBridge has no effect on the direction of Gome Telecom i.e., Gome Telecom and Zhengping RoadBridge go up and down completely randomly.
Pair Corralation between Gome Telecom and Zhengping RoadBridge
Assuming the 90 days trading horizon Gome Telecom Equipment is expected to generate 0.99 times more return on investment than Zhengping RoadBridge. However, Gome Telecom Equipment is 1.02 times less risky than Zhengping RoadBridge. It trades about 0.13 of its potential returns per unit of risk. Zhengping RoadBridge Constr is currently generating about 0.11 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. Zhengping RoadBridge Constr
Performance |
| Timeline |
| Gome Telecom Equipment |
| Zhengping RoadBridge |
Gome Telecom and Zhengping RoadBridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Zhengping RoadBridge
The main advantage of trading using opposite Gome Telecom and Zhengping RoadBridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Zhengping RoadBridge 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 Zhengping RoadBridge will offset losses from the drop in Zhengping RoadBridge's long position.| Gome Telecom vs. Ming Yang Smart | Gome Telecom vs. 159681 | Gome Telecom vs. 159005 | Gome Telecom vs. Loctek Ergonomic Technology |
| Zhengping RoadBridge vs. 159681 | Zhengping RoadBridge vs. 159005 | Zhengping RoadBridge vs. Loctek Ergonomic Technology | Zhengping RoadBridge vs. 516220 |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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