Correlation Between Gome Telecom and Western Superconducting
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By analyzing existing cross correlation between Gome Telecom Equipment and Western Superconducting Tech, you can compare the effects of market volatilities on Gome Telecom and Western Superconducting 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 Western Superconducting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Western Superconducting.
Diversification Opportunities for Gome Telecom and Western Superconducting
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gome and Western is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Western Superconducting Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Superconducting 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 Western Superconducting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Superconducting has no effect on the direction of Gome Telecom i.e., Gome Telecom and Western Superconducting go up and down completely randomly.
Pair Corralation between Gome Telecom and Western Superconducting
Assuming the 90 days trading horizon Gome Telecom Equipment is expected to under-perform the Western Superconducting. In addition to that, Gome Telecom is 1.22 times more volatile than Western Superconducting Tech. It trades about -0.04 of its total potential returns per unit of risk. Western Superconducting Tech is currently generating about 0.01 per unit of volatility. If you would invest 4,612 in Western Superconducting Tech on September 4, 2024 and sell it today you would lose (117.00) from holding Western Superconducting Tech or give up 2.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.64% |
| Values | Daily Returns |
Gome Telecom Equipment vs. Western Superconducting Tech
Performance |
| Timeline |
| Gome Telecom Equipment |
| Western Superconducting |
Gome Telecom and Western Superconducting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Western Superconducting
The main advantage of trading using opposite Gome Telecom and Western Superconducting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Western Superconducting 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 Western Superconducting will offset losses from the drop in Western Superconducting's long position.| Gome Telecom vs. Biwin Storage Technology | Gome Telecom vs. PetroChina Co Ltd | Gome Telecom vs. Industrial and Commercial | Gome Telecom vs. China Construction Bank |
| Western Superconducting vs. Bank of China | Western Superconducting vs. Kweichow Moutai Co | Western Superconducting vs. PetroChina Co Ltd | Western Superconducting vs. Bank of Communications |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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