Correlation Between Air China and Gome Telecom
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By analyzing existing cross correlation between Air China Ltd and Gome Telecom Equipment, you can compare the effects of market volatilities on Air China and Gome Telecom 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 Air China with a short position of Gome Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air China and Gome Telecom.
Diversification Opportunities for Air China and Gome Telecom
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Air and Gome is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Air China Ltd and Gome Telecom Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gome Telecom Equipment and Air China 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 Air China Ltd are associated (or correlated) with Gome Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gome Telecom Equipment has no effect on the direction of Air China i.e., Air China and Gome Telecom go up and down completely randomly.
Pair Corralation between Air China and Gome Telecom
Assuming the 90 days trading horizon Air China Ltd is expected to generate 0.46 times more return on investment than Gome Telecom. However, Air China Ltd is 2.15 times less risky than Gome Telecom. It trades about 0.05 of its potential returns per unit of risk. Gome Telecom Equipment is currently generating about -0.02 per unit of risk. If you would invest 747.00 in Air China Ltd on September 12, 2024 and sell it today you would earn a total of 139.00 from holding Air China Ltd or generate 18.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air China Ltd vs. Gome Telecom Equipment
Performance |
| Timeline |
| Air China |
| Gome Telecom Equipment |
Air China and Gome Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air China and Gome Telecom
The main advantage of trading using opposite Air China and Gome Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air China position performs unexpectedly, Gome Telecom 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 Gome Telecom will offset losses from the drop in Gome Telecom's long position.| Air China vs. Shanghai Action Education | Air China vs. Heilongjiang Publishing Media | Air China vs. Qtone Education Group | Air China vs. Southern PublishingMedia Co |
| Gome Telecom vs. Industrial and Commercial | Gome Telecom vs. Agricultural Bank of | Gome Telecom vs. China Construction Bank | Gome Telecom vs. Bank of China |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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