Correlation Between Huatian Hotel and Nanhua Bio
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By analyzing existing cross correlation between Huatian Hotel Group and Nanhua Bio Medicine, you can compare the effects of market volatilities on Huatian Hotel and Nanhua Bio 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 Huatian Hotel with a short position of Nanhua Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huatian Hotel and Nanhua Bio.
Diversification Opportunities for Huatian Hotel and Nanhua Bio
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Huatian and Nanhua is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Huatian Hotel Group and Nanhua Bio Medicine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanhua Bio Medicine and Huatian Hotel 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 Huatian Hotel Group are associated (or correlated) with Nanhua Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanhua Bio Medicine has no effect on the direction of Huatian Hotel i.e., Huatian Hotel and Nanhua Bio go up and down completely randomly.
Pair Corralation between Huatian Hotel and Nanhua Bio
Assuming the 90 days trading horizon Huatian Hotel Group is expected to under-perform the Nanhua Bio. But the stock apears to be less risky and, when comparing its historical volatility, Huatian Hotel Group is 1.19 times less risky than Nanhua Bio. The stock trades about -0.09 of its potential returns per unit of risk. The Nanhua Bio Medicine is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 835.00 in Nanhua Bio Medicine on November 1, 2024 and sell it today you would earn a total of 50.00 from holding Nanhua Bio Medicine or generate 5.99% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Huatian Hotel Group vs. Nanhua Bio Medicine
Performance |
Timeline |
Huatian Hotel Group |
Nanhua Bio Medicine |
Huatian Hotel and Nanhua Bio Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Huatian Hotel and Nanhua Bio
The main advantage of trading using opposite Huatian Hotel and Nanhua Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huatian Hotel position performs unexpectedly, Nanhua Bio 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 Nanhua Bio will offset losses from the drop in Nanhua Bio's long position.Huatian Hotel vs. Chenzhou Jingui Silver | Huatian Hotel vs. Guocheng Mining Co | Huatian Hotel vs. Shenyang Blue Silver | Huatian Hotel vs. Jiangxi Naipu Mining |
Nanhua Bio vs. Senci Electric Machinery | Nanhua Bio vs. Shanghai Yanpu Metal | Nanhua Bio vs. JCHX Mining Management | Nanhua Bio vs. Guangzhou KDT Machinery |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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