Correlation Between Huatian Hotel and Zhongyin Babi
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By analyzing existing cross correlation between Huatian Hotel Group and Zhongyin Babi Food, you can compare the effects of market volatilities on Huatian Hotel and Zhongyin Babi 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 Zhongyin Babi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huatian Hotel and Zhongyin Babi.
Diversification Opportunities for Huatian Hotel and Zhongyin Babi
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Huatian and Zhongyin is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Huatian Hotel Group and Zhongyin Babi Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongyin Babi Food 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 Zhongyin Babi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongyin Babi Food has no effect on the direction of Huatian Hotel i.e., Huatian Hotel and Zhongyin Babi go up and down completely randomly.
Pair Corralation between Huatian Hotel and Zhongyin Babi
Assuming the 90 days trading horizon Huatian Hotel Group is expected to under-perform the Zhongyin Babi. But the stock apears to be less risky and, when comparing its historical volatility, Huatian Hotel Group is 1.12 times less risky than Zhongyin Babi. The stock trades about -0.16 of its potential returns per unit of risk. The Zhongyin Babi Food is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,776 in Zhongyin Babi Food on October 28, 2024 and sell it today you would earn a total of 36.00 from holding Zhongyin Babi Food or generate 2.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huatian Hotel Group vs. Zhongyin Babi Food
Performance |
| Timeline |
| Huatian Hotel Group |
| Zhongyin Babi Food |
Huatian Hotel and Zhongyin Babi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huatian Hotel and Zhongyin Babi
The main advantage of trading using opposite Huatian Hotel and Zhongyin Babi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huatian Hotel position performs unexpectedly, Zhongyin Babi 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 Zhongyin Babi will offset losses from the drop in Zhongyin Babi's long position.| Huatian Hotel vs. Dareway Software Co | Huatian Hotel vs. Lutian Machinery Co | Huatian Hotel vs. Linzhou Heavy Machinery | Huatian Hotel vs. Linewell Software Co |
| Zhongyin Babi vs. Kweichow Moutai Co | Zhongyin Babi vs. Contemporary Amperex Technology | Zhongyin Babi vs. G bits Network Technology | Zhongyin Babi vs. Beijing Roborock Technology |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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