Correlation Between Gome Telecom and Nexchip Semiconductor
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By analyzing existing cross correlation between Gome Telecom Equipment and Nexchip Semiconductor Corp, you can compare the effects of market volatilities on Gome Telecom and Nexchip Semiconductor 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 Nexchip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Nexchip Semiconductor.
Diversification Opportunities for Gome Telecom and Nexchip Semiconductor
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gome and Nexchip is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Nexchip Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexchip Semiconductor 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 Nexchip Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexchip Semiconductor has no effect on the direction of Gome Telecom i.e., Gome Telecom and Nexchip Semiconductor go up and down completely randomly.
Pair Corralation between Gome Telecom and Nexchip Semiconductor
Assuming the 90 days trading horizon Gome Telecom is expected to generate 3.1 times less return on investment than Nexchip Semiconductor. But when comparing it to its historical volatility, Gome Telecom Equipment is 1.41 times less risky than Nexchip Semiconductor. It trades about 0.14 of its potential returns per unit of risk. Nexchip Semiconductor Corp is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 1,984 in Nexchip Semiconductor Corp on September 5, 2024 and sell it today you would earn a total of 777.00 from holding Nexchip Semiconductor Corp or generate 39.16% 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. Nexchip Semiconductor Corp
Performance |
| Timeline |
| Gome Telecom Equipment |
| Nexchip Semiconductor |
Gome Telecom and Nexchip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Nexchip Semiconductor
The main advantage of trading using opposite Gome Telecom and Nexchip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Nexchip Semiconductor 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 Nexchip Semiconductor will offset losses from the drop in Nexchip Semiconductor'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 |
| Nexchip Semiconductor vs. Glodon Software Co | Nexchip Semiconductor vs. Aluminum Corp of | Nexchip Semiconductor vs. China National Software | Nexchip Semiconductor vs. Beijing Kaiwen Education |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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