Correlation Between Huatian Hotel and Gansu Yasheng
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By analyzing existing cross correlation between Huatian Hotel Group and Gansu Yasheng Industrial, you can compare the effects of market volatilities on Huatian Hotel and Gansu Yasheng 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 Gansu Yasheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huatian Hotel and Gansu Yasheng.
Diversification Opportunities for Huatian Hotel and Gansu Yasheng
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Huatian and Gansu is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Huatian Hotel Group and Gansu Yasheng Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gansu Yasheng Industrial 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 Gansu Yasheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gansu Yasheng Industrial has no effect on the direction of Huatian Hotel i.e., Huatian Hotel and Gansu Yasheng go up and down completely randomly.
Pair Corralation between Huatian Hotel and Gansu Yasheng
Assuming the 90 days trading horizon Huatian Hotel is expected to generate 1.58 times less return on investment than Gansu Yasheng. But when comparing it to its historical volatility, Huatian Hotel Group is 1.09 times less risky than Gansu Yasheng. It trades about 0.1 of its potential returns per unit of risk. Gansu Yasheng Industrial is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 297.00 in Gansu Yasheng Industrial on September 12, 2024 and sell it today you would earn a total of 27.00 from holding Gansu Yasheng Industrial or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huatian Hotel Group vs. Gansu Yasheng Industrial
Performance |
| Timeline |
| Huatian Hotel Group |
| Gansu Yasheng Industrial |
Huatian Hotel and Gansu Yasheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huatian Hotel and Gansu Yasheng
The main advantage of trading using opposite Huatian Hotel and Gansu Yasheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huatian Hotel position performs unexpectedly, Gansu Yasheng 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 Gansu Yasheng will offset losses from the drop in Gansu Yasheng's long position.| Huatian Hotel vs. Lutian Machinery Co | Huatian Hotel vs. PetroChina Co Ltd | Huatian Hotel vs. Bank of China | Huatian Hotel vs. Gansu Jiu Steel |
| Gansu Yasheng vs. China Petroleum Chemical | Gansu Yasheng vs. PetroChina Co Ltd | Gansu Yasheng vs. China State Construction | Gansu Yasheng vs. China Railway Group |
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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