Correlation Between Huatian Hotel and Zoje Resources
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By analyzing existing cross correlation between Huatian Hotel Group and Zoje Resources Investment, you can compare the effects of market volatilities on Huatian Hotel and Zoje Resources 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 Zoje Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huatian Hotel and Zoje Resources.
Diversification Opportunities for Huatian Hotel and Zoje Resources
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Huatian and Zoje is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Huatian Hotel Group and Zoje Resources Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoje Resources Investment 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 Zoje Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoje Resources Investment has no effect on the direction of Huatian Hotel i.e., Huatian Hotel and Zoje Resources go up and down completely randomly.
Pair Corralation between Huatian Hotel and Zoje Resources
Assuming the 90 days trading horizon Huatian Hotel is expected to generate 1.7 times less return on investment than Zoje Resources. But when comparing it to its historical volatility, Huatian Hotel Group is 1.39 times less risky than Zoje Resources. It trades about 0.01 of its potential returns per unit of risk. Zoje Resources Investment is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 273.00 in Zoje Resources Investment on September 1, 2024 and sell it today you would lose (2.00) from holding Zoje Resources Investment or give up 0.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huatian Hotel Group vs. Zoje Resources Investment
Performance |
| Timeline |
| Huatian Hotel Group |
| Zoje Resources Investment |
Huatian Hotel and Zoje Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huatian Hotel and Zoje Resources
The main advantage of trading using opposite Huatian Hotel and Zoje Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huatian Hotel position performs unexpectedly, Zoje Resources 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 Zoje Resources will offset losses from the drop in Zoje Resources' long position.| Huatian Hotel vs. Cultural Investment Holdings | Huatian Hotel vs. Gome Telecom Equipment | Huatian Hotel vs. Bus Online Co | Huatian Hotel vs. Holitech Technology Co |
| Zoje Resources vs. New China Life | Zoje Resources vs. Ming Yang Smart | Zoje Resources vs. 159681 | Zoje Resources vs. 159005 |
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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