Correlation Between Gome Telecom and Ningbo Tip
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By analyzing existing cross correlation between Gome Telecom Equipment and Ningbo Tip Rubber, you can compare the effects of market volatilities on Gome Telecom and Ningbo Tip 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 Ningbo Tip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Ningbo Tip.
Diversification Opportunities for Gome Telecom and Ningbo Tip
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gome and Ningbo is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Ningbo Tip Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Tip Rubber 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 Ningbo Tip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Tip Rubber has no effect on the direction of Gome Telecom i.e., Gome Telecom and Ningbo Tip go up and down completely randomly.
Pair Corralation between Gome Telecom and Ningbo Tip
Assuming the 90 days trading horizon Gome Telecom Equipment is expected to generate 1.24 times more return on investment than Ningbo Tip. However, Gome Telecom is 1.24 times more volatile than Ningbo Tip Rubber. It trades about 0.14 of its potential returns per unit of risk. Ningbo Tip Rubber is currently generating about 0.17 per unit of risk. If you would invest 168.00 in Gome Telecom Equipment on September 5, 2024 and sell it today you would earn a total of 18.00 from holding Gome Telecom Equipment or generate 10.71% 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. Ningbo Tip Rubber
Performance |
| Timeline |
| Gome Telecom Equipment |
| Ningbo Tip Rubber |
Gome Telecom and Ningbo Tip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Ningbo Tip
The main advantage of trading using opposite Gome Telecom and Ningbo Tip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Ningbo Tip 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 Ningbo Tip will offset losses from the drop in Ningbo Tip's long position.| Gome Telecom vs. Guangzhou KingTeller Technology | Gome Telecom vs. Hoshine Silicon Ind | Gome Telecom vs. Kingsignal Technology Co | Gome Telecom vs. Kangping Technology Co |
| Ningbo Tip vs. Cultural Investment Holdings | Ningbo Tip vs. Gome Telecom Equipment | Ningbo Tip vs. Bus Online Co | Ningbo Tip 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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