Correlation Between Shanghai Sanyou and Gome Telecom
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By analyzing existing cross correlation between Shanghai Sanyou Medical and Gome Telecom Equipment, you can compare the effects of market volatilities on Shanghai Sanyou 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 Shanghai Sanyou with a short position of Gome Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Sanyou and Gome Telecom.
Diversification Opportunities for Shanghai Sanyou and Gome Telecom
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shanghai and Gome is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Sanyou Medical 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 Shanghai Sanyou 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 Shanghai Sanyou Medical 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 Shanghai Sanyou i.e., Shanghai Sanyou and Gome Telecom go up and down completely randomly.
Pair Corralation between Shanghai Sanyou and Gome Telecom
Assuming the 90 days trading horizon Shanghai Sanyou Medical is expected to generate 1.65 times more return on investment than Gome Telecom. However, Shanghai Sanyou is 1.65 times more volatile than Gome Telecom Equipment. It trades about -0.16 of its potential returns per unit of risk. Gome Telecom Equipment is currently generating about -1.71 per unit of risk. If you would invest 2,193 in Shanghai Sanyou Medical on October 9, 2024 and sell it today you would lose (248.00) from holding Shanghai Sanyou Medical or give up 11.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Sanyou Medical vs. Gome Telecom Equipment
Performance |
| Timeline |
| Shanghai Sanyou Medical |
| Gome Telecom Equipment |
Shanghai Sanyou and Gome Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Sanyou and Gome Telecom
The main advantage of trading using opposite Shanghai Sanyou and Gome Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Sanyou 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.| Shanghai Sanyou vs. Shanghai Ziyan Foods | Shanghai Sanyou vs. Wuhan Yangtze Communication | Shanghai Sanyou vs. Dr Peng Telecom | Shanghai Sanyou vs. Guangzhou Haige Communications |
| Gome Telecom vs. Pengxin International Mining | Gome Telecom vs. Bank of Communications | Gome Telecom vs. Allwin Telecommunication Co | Gome Telecom vs. Guangdong Jingyi Metal |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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