Correlation Between Ningbo Fangzheng and Gome Telecom
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By analyzing existing cross correlation between Ningbo Fangzheng Automobile and Gome Telecom Equipment, you can compare the effects of market volatilities on Ningbo Fangzheng 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 Ningbo Fangzheng with a short position of Gome Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Fangzheng and Gome Telecom.
Diversification Opportunities for Ningbo Fangzheng and Gome Telecom
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ningbo and Gome is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Fangzheng Automobile 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 Ningbo Fangzheng 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 Ningbo Fangzheng Automobile 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 Ningbo Fangzheng i.e., Ningbo Fangzheng and Gome Telecom go up and down completely randomly.
Pair Corralation between Ningbo Fangzheng and Gome Telecom
Assuming the 90 days trading horizon Ningbo Fangzheng Automobile is expected to generate 1.21 times more return on investment than Gome Telecom. However, Ningbo Fangzheng is 1.21 times more volatile than Gome Telecom Equipment. It trades about 0.05 of its potential returns per unit of risk. Gome Telecom Equipment is currently generating about -0.09 per unit of risk. If you would invest 1,450 in Ningbo Fangzheng Automobile on September 26, 2024 and sell it today you would earn a total of 121.00 from holding Ningbo Fangzheng Automobile or generate 8.34% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Ningbo Fangzheng Automobile vs. Gome Telecom Equipment
Performance |
Timeline |
Ningbo Fangzheng Aut |
Gome Telecom Equipment |
Ningbo Fangzheng and Gome Telecom Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ningbo Fangzheng and Gome Telecom
The main advantage of trading using opposite Ningbo Fangzheng and Gome Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Fangzheng 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.Ningbo Fangzheng vs. China Life Insurance | Ningbo Fangzheng vs. Cinda Securities Co | Ningbo Fangzheng vs. Piotech Inc A | Ningbo Fangzheng vs. Dongxing Sec 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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