Correlation Between GOME Retail and ResMed

Can any of the company-specific risk be diversified away by investing in both GOME Retail and ResMed at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining GOME Retail and ResMed into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GOME Retail Holdings and ResMed Inc, you can compare the effects of market volatilities on GOME Retail and ResMed 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 GOME Retail with a short position of ResMed. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOME Retail and ResMed.

Diversification Opportunities for GOME Retail and ResMed

0.0

Correlation Coefficient

GOME Retail  ResMed

Pay attention - limited upside

The 3 months correlation between GOME and ResMed is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GOME Retail Holdings and ResMed Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ResMed Inc and GOME Retail 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 GOME Retail Holdings are associated (or correlated) with ResMed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ResMed Inc has no effect on the direction of GOME Retail i.e., GOME Retail and ResMed go up and down completely randomly.

Pair Corralation between GOME Retail and ResMed

If you would invest  0.10  in GOME Retail Holdings on December 26, 2024 and sell it today you would earn a total of  0.00  from holding GOME Retail Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

GOME Retail Holdings  vs.  ResMed Inc

GOME Retail Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days GOME Retail Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, GOME Retail is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

ResMed Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days ResMed Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with GOME Retail and ResMed

The main advantage of trading using opposite GOME Retail and ResMed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOME Retail position performs unexpectedly, ResMed 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 ResMed will offset losses from the drop in ResMed's long position.

The idea behind GOME Retail Holdings and ResMed Inc 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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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 Commodity Directory module to find actively traded commodities issued by global exchanges.