Correlation Between Kangping Technology and Gome Telecom
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By analyzing existing cross correlation between Kangping Technology Co and Gome Telecom Equipment, you can compare the effects of market volatilities on Kangping Technology 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 Kangping Technology with a short position of Gome Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kangping Technology and Gome Telecom.
Diversification Opportunities for Kangping Technology and Gome Telecom
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kangping and Gome is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Kangping Technology Co 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 Kangping Technology 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 Kangping Technology Co 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 Kangping Technology i.e., Kangping Technology and Gome Telecom go up and down completely randomly.
Pair Corralation between Kangping Technology and Gome Telecom
Assuming the 90 days trading horizon Kangping Technology is expected to generate 1.69 times less return on investment than Gome Telecom. But when comparing it to its historical volatility, Kangping Technology Co is 1.78 times less risky than Gome Telecom. It trades about 0.16 of its potential returns per unit of risk. Gome Telecom Equipment is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 167.00 in Gome Telecom Equipment on September 7, 2024 and sell it today you would earn a total of 19.00 from holding Gome Telecom Equipment or generate 11.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Kangping Technology Co vs. Gome Telecom Equipment
Performance |
Timeline |
Kangping Technology |
Gome Telecom Equipment |
Kangping Technology and Gome Telecom Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kangping Technology and Gome Telecom
The main advantage of trading using opposite Kangping Technology and Gome Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kangping Technology 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.Kangping Technology vs. Guangzhou KDT Machinery | Kangping Technology vs. Guizhou BroadcastingTV Info | Kangping Technology vs. Shandong Mining Machinery | Kangping Technology vs. Ningbo Construction Co |
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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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