Correlation Between Huatian Hotel and Shanghai Action
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By analyzing existing cross correlation between Huatian Hotel Group and Shanghai Action Education, you can compare the effects of market volatilities on Huatian Hotel and Shanghai Action 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 Action. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huatian Hotel and Shanghai Action.
Diversification Opportunities for Huatian Hotel and Shanghai Action
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Huatian and Shanghai is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Huatian Hotel Group and Shanghai Action Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Action Education 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 Action. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Action Education has no effect on the direction of Huatian Hotel i.e., Huatian Hotel and Shanghai Action go up and down completely randomly.
Pair Corralation between Huatian Hotel and Shanghai Action
Assuming the 90 days trading horizon Huatian Hotel Group is expected to generate 0.96 times more return on investment than Shanghai Action. However, Huatian Hotel Group is 1.04 times less risky than Shanghai Action. It trades about 0.1 of its potential returns per unit of risk. Shanghai Action Education is currently generating about -0.02 per unit of risk. If you would invest 295.00 in Huatian Hotel Group on November 7, 2024 and sell it today you would earn a total of 8.00 from holding Huatian Hotel Group or generate 2.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huatian Hotel Group vs. Shanghai Action Education
Performance |
| Timeline |
| Huatian Hotel Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Shanghai Action Education |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Huatian Hotel and Shanghai Action Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huatian Hotel and Shanghai Action
The main advantage of trading using opposite Huatian Hotel and Shanghai Action positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huatian Hotel position performs unexpectedly, Shanghai Action 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 Action will offset losses from the drop in Shanghai Action's long position.The idea behind Huatian Hotel Group and Shanghai Action Education pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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