Correlation Between Guangzhou KingTeller and Gome Telecom
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By analyzing existing cross correlation between Guangzhou KingTeller Technology and Gome Telecom Equipment, you can compare the effects of market volatilities on Guangzhou KingTeller 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 Guangzhou KingTeller with a short position of Gome Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou KingTeller and Gome Telecom.
Diversification Opportunities for Guangzhou KingTeller and Gome Telecom
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and Gome is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou KingTeller Technolog 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 Guangzhou KingTeller 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 Guangzhou KingTeller Technology 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 Guangzhou KingTeller i.e., Guangzhou KingTeller and Gome Telecom go up and down completely randomly.
Pair Corralation between Guangzhou KingTeller and Gome Telecom
Assuming the 90 days trading horizon Guangzhou KingTeller Technology is expected to generate 1.17 times more return on investment than Gome Telecom. However, Guangzhou KingTeller is 1.17 times more volatile than Gome Telecom Equipment. It trades about 0.22 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 338.00 in Guangzhou KingTeller Technology on September 7, 2024 and sell it today you would earn a total of 205.00 from holding Guangzhou KingTeller Technology or generate 60.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Guangzhou KingTeller Technolog vs. Gome Telecom Equipment
Performance |
Timeline |
Guangzhou KingTeller |
Gome Telecom Equipment |
Guangzhou KingTeller and Gome Telecom Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Guangzhou KingTeller and Gome Telecom
The main advantage of trading using opposite Guangzhou KingTeller and Gome Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou KingTeller 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.Guangzhou KingTeller vs. Industrial and Commercial | Guangzhou KingTeller vs. Agricultural Bank of | Guangzhou KingTeller vs. China Construction Bank | Guangzhou KingTeller vs. Bank of China |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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