Correlation Between Gome Telecom and Olympic Circuit
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By analyzing existing cross correlation between Gome Telecom Equipment and Olympic Circuit Technology, you can compare the effects of market volatilities on Gome Telecom and Olympic Circuit 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 Olympic Circuit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Olympic Circuit.
Diversification Opportunities for Gome Telecom and Olympic Circuit
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gome and Olympic is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Olympic Circuit Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olympic Circuit Tech 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 Olympic Circuit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Olympic Circuit Tech has no effect on the direction of Gome Telecom i.e., Gome Telecom and Olympic Circuit go up and down completely randomly.
Pair Corralation between Gome Telecom and Olympic Circuit
Assuming the 90 days trading horizon Gome Telecom is expected to generate 2.71 times less return on investment than Olympic Circuit. But when comparing it to its historical volatility, Gome Telecom Equipment is 1.17 times less risky than Olympic Circuit. It trades about 0.04 of its potential returns per unit of risk. Olympic Circuit Technology is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,761 in Olympic Circuit Technology on August 30, 2024 and sell it today you would earn a total of 236.00 from holding Olympic Circuit Technology or generate 8.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gome Telecom Equipment vs. Olympic Circuit Technology
Performance |
| Timeline |
| Gome Telecom Equipment |
| Olympic Circuit Tech |
Gome Telecom and Olympic Circuit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Olympic Circuit
The main advantage of trading using opposite Gome Telecom and Olympic Circuit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Olympic Circuit 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 Olympic Circuit will offset losses from the drop in Olympic Circuit's long position.| Gome Telecom vs. 360 Security Technology | Gome Telecom vs. China Asset Management | Gome Telecom vs. Vontron Technology Co | Gome Telecom vs. China Life Insurance |
| Olympic Circuit vs. Cultural Investment Holdings | Olympic Circuit vs. Gome Telecom Equipment | Olympic Circuit vs. Bus Online Co | Olympic Circuit 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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