Correlation Between Huatian Hotel and Nantong Haixing
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By analyzing existing cross correlation between Huatian Hotel Group and Nantong Haixing Electronics, you can compare the effects of market volatilities on Huatian Hotel and Nantong Haixing 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 Nantong Haixing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huatian Hotel and Nantong Haixing.
Diversification Opportunities for Huatian Hotel and Nantong Haixing
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Huatian and Nantong is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Huatian Hotel Group and Nantong Haixing Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nantong Haixing Elec 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 Nantong Haixing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nantong Haixing Elec has no effect on the direction of Huatian Hotel i.e., Huatian Hotel and Nantong Haixing go up and down completely randomly.
Pair Corralation between Huatian Hotel and Nantong Haixing
Assuming the 90 days trading horizon Huatian Hotel Group is expected to under-perform the Nantong Haixing. In addition to that, Huatian Hotel is 1.36 times more volatile than Nantong Haixing Electronics. It trades about -0.02 of its total potential returns per unit of risk. Nantong Haixing Electronics is currently generating about -0.01 per unit of volatility. If you would invest 1,625 in Nantong Haixing Electronics on August 30, 2024 and sell it today you would lose (265.00) from holding Nantong Haixing Electronics or give up 16.31% 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. Nantong Haixing Electronics
Performance |
| Timeline |
| Huatian Hotel Group |
| Nantong Haixing Elec |
Huatian Hotel and Nantong Haixing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huatian Hotel and Nantong Haixing
The main advantage of trading using opposite Huatian Hotel and Nantong Haixing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huatian Hotel position performs unexpectedly, Nantong Haixing 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 Nantong Haixing will offset losses from the drop in Nantong Haixing's long position.| Huatian Hotel vs. China Petroleum Chemical | Huatian Hotel vs. PetroChina Co Ltd | Huatian Hotel vs. China State Construction | Huatian Hotel vs. China Railway Group |
| Nantong Haixing vs. Hengerda New Materials | Nantong Haixing vs. Super Dragon Engineering Plastics | Nantong Haixing vs. Songz Automobile Air | Nantong Haixing vs. Malion New Materials |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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