Correlation Between Huatian Hotel and Guangzhou Risong
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By analyzing existing cross correlation between Huatian Hotel Group and Guangzhou Risong Intelligent, you can compare the effects of market volatilities on Huatian Hotel and Guangzhou Risong 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 Guangzhou Risong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huatian Hotel and Guangzhou Risong.
Diversification Opportunities for Huatian Hotel and Guangzhou Risong
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Huatian and Guangzhou is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Huatian Hotel Group and Guangzhou Risong Intelligent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Risong Int 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 Guangzhou Risong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Risong Int has no effect on the direction of Huatian Hotel i.e., Huatian Hotel and Guangzhou Risong go up and down completely randomly.
Pair Corralation between Huatian Hotel and Guangzhou Risong
Assuming the 90 days trading horizon Huatian Hotel Group is expected to under-perform the Guangzhou Risong. But the stock apears to be less risky and, when comparing its historical volatility, Huatian Hotel Group is 1.5 times less risky than Guangzhou Risong. The stock trades about -0.02 of its potential returns per unit of risk. The Guangzhou Risong Intelligent is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,633 in Guangzhou Risong Intelligent on December 5, 2024 and sell it today you would earn a total of 2,697 from holding Guangzhou Risong Intelligent or generate 102.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Huatian Hotel Group vs. Guangzhou Risong Intelligent
Performance |
| Timeline |
| Huatian Hotel Group |
| Guangzhou Risong Int |
Huatian Hotel and Guangzhou Risong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huatian Hotel and Guangzhou Risong
The main advantage of trading using opposite Huatian Hotel and Guangzhou Risong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huatian Hotel position performs unexpectedly, Guangzhou Risong 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 Guangzhou Risong will offset losses from the drop in Guangzhou Risong's long position.| Huatian Hotel vs. Shantou Wanshun Package | ||
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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