Correlation Between Gome Telecom and HOB Biotech
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By analyzing existing cross correlation between Gome Telecom Equipment and HOB Biotech Group, you can compare the effects of market volatilities on Gome Telecom and HOB Biotech 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 HOB Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gome Telecom and HOB Biotech.
Diversification Opportunities for Gome Telecom and HOB Biotech
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gome and HOB is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Gome Telecom Equipment and HOB Biotech Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOB Biotech Group 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 HOB Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HOB Biotech Group has no effect on the direction of Gome Telecom i.e., Gome Telecom and HOB Biotech go up and down completely randomly.
Pair Corralation between Gome Telecom and HOB Biotech
Assuming the 90 days trading horizon Gome Telecom is expected to generate 59.22 times less return on investment than HOB Biotech. But when comparing it to its historical volatility, Gome Telecom Equipment is 2.35 times less risky than HOB Biotech. It trades about 0.01 of its potential returns per unit of risk. HOB Biotech Group is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 2,358 in HOB Biotech Group on September 12, 2024 and sell it today you would earn a total of 8,642 from holding HOB Biotech Group or generate 366.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.28% |
| Values | Daily Returns |
Gome Telecom Equipment vs. HOB Biotech Group
Performance |
| Timeline |
| Gome Telecom Equipment |
| HOB Biotech Group |
Gome Telecom and HOB Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gome Telecom and HOB Biotech
The main advantage of trading using opposite Gome Telecom and HOB Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gome Telecom position performs unexpectedly, HOB Biotech 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 HOB Biotech will offset losses from the drop in HOB Biotech's long position.| Gome Telecom vs. Industrial and Commercial | Gome Telecom vs. Agricultural Bank of | Gome Telecom vs. China Construction Bank | Gome Telecom vs. Bank of China |
| HOB Biotech vs. Industrial and Commercial | HOB Biotech vs. Kweichow Moutai Co | HOB Biotech vs. Agricultural Bank of | HOB Biotech vs. China Mobile Limited |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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