Correlation Between Gome Telecom and Semiconductor Manufacturing
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By analyzing existing cross correlation between Gome Telecom Equipment and Semiconductor Manufacturing Electronics, you can compare the effects of market volatilities on Gome Telecom and Semiconductor Manufacturing 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 Semiconductor Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and Semiconductor Manufacturing.
Diversification Opportunities for Gome Telecom and Semiconductor Manufacturing
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gome and Semiconductor is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and Semiconductor Manufacturing El in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semiconductor Manufacturing 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 Semiconductor Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semiconductor Manufacturing has no effect on the direction of Gome Telecom i.e., Gome Telecom and Semiconductor Manufacturing go up and down completely randomly.
Pair Corralation between Gome Telecom and Semiconductor Manufacturing
Assuming the 90 days trading horizon Gome Telecom is expected to generate 1.75 times less return on investment than Semiconductor Manufacturing. In addition to that, Gome Telecom is 1.03 times more volatile than Semiconductor Manufacturing Electronics. It trades about 0.14 of its total potential returns per unit of risk. Semiconductor Manufacturing Electronics is currently generating about 0.26 per unit of volatility. If you would invest 475.00 in Semiconductor Manufacturing Electronics on September 5, 2024 and sell it today you would earn a total of 99.00 from holding Semiconductor Manufacturing Electronics or generate 20.84% 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. Semiconductor Manufacturing El
Performance |
| Timeline |
| Gome Telecom Equipment |
| Semiconductor Manufacturing |
Gome Telecom and Semiconductor Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and Semiconductor Manufacturing
The main advantage of trading using opposite Gome Telecom and Semiconductor Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, Semiconductor Manufacturing 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 Semiconductor Manufacturing will offset losses from the drop in Semiconductor Manufacturing'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 |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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