Correlation Between Huatian Hotel and Shanghai Rongtai
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By analyzing existing cross correlation between Huatian Hotel Group and Shanghai Rongtai Health, you can compare the effects of market volatilities on Huatian Hotel and Shanghai Rongtai 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 Shanghai Rongtai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huatian Hotel and Shanghai Rongtai.
Diversification Opportunities for Huatian Hotel and Shanghai Rongtai
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Huatian and Shanghai is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Huatian Hotel Group and Shanghai Rongtai Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Rongtai Health 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 Shanghai Rongtai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Rongtai Health has no effect on the direction of Huatian Hotel i.e., Huatian Hotel and Shanghai Rongtai go up and down completely randomly.
Pair Corralation between Huatian Hotel and Shanghai Rongtai
Assuming the 90 days trading horizon Huatian Hotel Group is expected to under-perform the Shanghai Rongtai. In addition to that, Huatian Hotel is 1.2 times more volatile than Shanghai Rongtai Health. It trades about -0.02 of its total potential returns per unit of risk. Shanghai Rongtai Health is currently generating about -0.02 per unit of volatility. If you would invest 2,053 in Shanghai Rongtai Health on August 29, 2024 and sell it today you would lose (623.00) from holding Shanghai Rongtai Health or give up 30.35% 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. Shanghai Rongtai Health
Performance |
| Timeline |
| Huatian Hotel Group |
| Shanghai Rongtai Health |
Huatian Hotel and Shanghai Rongtai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huatian Hotel and Shanghai Rongtai
The main advantage of trading using opposite Huatian Hotel and Shanghai Rongtai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huatian Hotel position performs unexpectedly, Shanghai Rongtai 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 Shanghai Rongtai will offset losses from the drop in Shanghai Rongtai's long position.| Huatian Hotel vs. Biwin Storage Technology | Huatian Hotel vs. PetroChina Co Ltd | Huatian Hotel vs. Industrial and Commercial | Huatian Hotel vs. China Construction Bank |
| Shanghai Rongtai vs. Shenzhen MYS Environmental | Shanghai Rongtai vs. AVIC Fund Management | Shanghai Rongtai vs. Shenzhen Bingchuan Network | Shanghai Rongtai vs. Penghua Shenzhen Energy |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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