Correlation Between China State and Gome Telecom
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By analyzing existing cross correlation between China State Construction and Gome Telecom Equipment, you can compare the effects of market volatilities on China State 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 China State with a short position of Gome Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and Gome Telecom.
Diversification Opportunities for China State and Gome Telecom
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between China and Gome is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction 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 China State 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 China State Construction 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 China State i.e., China State and Gome Telecom go up and down completely randomly.
Pair Corralation between China State and Gome Telecom
Assuming the 90 days trading horizon China State Construction is expected to generate 0.57 times more return on investment than Gome Telecom. However, China State Construction is 1.77 times less risky than Gome Telecom. It trades about 0.02 of its potential returns per unit of risk. Gome Telecom Equipment is currently generating about -0.06 per unit of risk. If you would invest 553.00 in China State Construction on September 2, 2024 and sell it today you would earn a total of 45.00 from holding China State Construction or generate 8.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China State Construction vs. Gome Telecom Equipment
Performance |
| Timeline |
| China State Construction |
| Gome Telecom Equipment |
China State and Gome Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China State and Gome Telecom
The main advantage of trading using opposite China State and Gome Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State 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.| China State vs. 159681 | China State vs. 159005 | China State vs. Loctek Ergonomic Technology | China State vs. 516220 |
| Gome Telecom vs. Ming Yang Smart | Gome Telecom vs. 159681 | Gome Telecom vs. 159005 | Gome Telecom vs. Loctek Ergonomic Technology |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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