Correlation Between Gome Telecom and Shenzhen Transsion
Specify exactly 2 symbols:
By analyzing existing cross correlation between Gome Telecom Equipment and Shenzhen Transsion Holdings, you can compare the effects of market volatilities on Gome Telecom and Shenzhen Transsion 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 Shenzhen Transsion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Shenzhen Transsion.
Diversification Opportunities for Gome Telecom and Shenzhen Transsion
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gome and Shenzhen is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Shenzhen Transsion Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Transsion 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 Shenzhen Transsion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Transsion has no effect on the direction of Gome Telecom i.e., Gome Telecom and Shenzhen Transsion go up and down completely randomly.
Pair Corralation between Gome Telecom and Shenzhen Transsion
Assuming the 90 days trading horizon Gome Telecom Equipment is expected to under-perform the Shenzhen Transsion. But the stock apears to be less risky and, when comparing its historical volatility, Gome Telecom Equipment is 1.1 times less risky than Shenzhen Transsion. The stock trades about -0.54 of its potential returns per unit of risk. The Shenzhen Transsion Holdings is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 8,667 in Shenzhen Transsion Holdings on November 7, 2024 and sell it today you would earn a total of 1,372 from holding Shenzhen Transsion Holdings or generate 15.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gome Telecom Equipment vs. Shenzhen Transsion Holdings
Performance |
| Timeline |
| Gome Telecom Equipment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Shenzhen Transsion |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Gome Telecom and Shenzhen Transsion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Shenzhen Transsion
The main advantage of trading using opposite Gome Telecom and Shenzhen Transsion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Shenzhen Transsion 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 Shenzhen Transsion will offset losses from the drop in Shenzhen Transsion's long position.The idea behind Gome Telecom Equipment and Shenzhen Transsion Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |