Correlation Between Thinkon Semiconductor and Gome Telecom
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By analyzing existing cross correlation between Thinkon Semiconductor Jinzhou and Gome Telecom Equipment, you can compare the effects of market volatilities on Thinkon Semiconductor 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 Thinkon Semiconductor with a short position of Gome Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thinkon Semiconductor and Gome Telecom.
Diversification Opportunities for Thinkon Semiconductor and Gome Telecom
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Thinkon and Gome is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Thinkon Semiconductor Jinzhou 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 Thinkon Semiconductor 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 Thinkon Semiconductor Jinzhou 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 Thinkon Semiconductor i.e., Thinkon Semiconductor and Gome Telecom go up and down completely randomly.
Pair Corralation between Thinkon Semiconductor and Gome Telecom
Assuming the 90 days trading horizon Thinkon Semiconductor Jinzhou is expected to generate 0.95 times more return on investment than Gome Telecom. However, Thinkon Semiconductor Jinzhou is 1.05 times less risky than Gome Telecom. It trades about -0.07 of its potential returns per unit of risk. Gome Telecom Equipment is currently generating about -1.24 per unit of risk. If you would invest 2,443 in Thinkon Semiconductor Jinzhou on October 24, 2024 and sell it today you would lose (99.00) from holding Thinkon Semiconductor Jinzhou or give up 4.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thinkon Semiconductor Jinzhou vs. Gome Telecom Equipment
Performance |
| Timeline |
| Thinkon Semiconductor |
| Gome Telecom Equipment |
Thinkon Semiconductor and Gome Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thinkon Semiconductor and Gome Telecom
The main advantage of trading using opposite Thinkon Semiconductor and Gome Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thinkon Semiconductor 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.The idea behind Thinkon Semiconductor Jinzhou and Gome Telecom Equipment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Stocks Directory module to find actively traded stocks across global markets.
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