Correlation Between Guangzhou Dongfang and Hunan Investment
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By analyzing existing cross correlation between Guangzhou Dongfang Hotel and Hunan Investment Group, you can compare the effects of market volatilities on Guangzhou Dongfang and Hunan Investment 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 Guangzhou Dongfang with a short position of Hunan Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Dongfang and Hunan Investment.
Diversification Opportunities for Guangzhou Dongfang and Hunan Investment
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangzhou and Hunan is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Dongfang Hotel and Hunan Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Investment and Guangzhou Dongfang 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 Guangzhou Dongfang Hotel are associated (or correlated) with Hunan Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Investment has no effect on the direction of Guangzhou Dongfang i.e., Guangzhou Dongfang and Hunan Investment go up and down completely randomly.
Pair Corralation between Guangzhou Dongfang and Hunan Investment
Assuming the 90 days trading horizon Guangzhou Dongfang is expected to generate 21.43 times less return on investment than Hunan Investment. But when comparing it to its historical volatility, Guangzhou Dongfang Hotel is 2.09 times less risky than Hunan Investment. It trades about 0.02 of its potential returns per unit of risk. Hunan Investment Group is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 499.00 in Hunan Investment Group on August 31, 2024 and sell it today you would earn a total of 64.00 from holding Hunan Investment Group or generate 12.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Dongfang Hotel vs. Hunan Investment Group
Performance |
| Timeline |
| Guangzhou Dongfang Hotel |
| Hunan Investment |
Guangzhou Dongfang and Hunan Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Dongfang and Hunan Investment
The main advantage of trading using opposite Guangzhou Dongfang and Hunan Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Dongfang position performs unexpectedly, Hunan Investment 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 Hunan Investment will offset losses from the drop in Hunan Investment's long position.| Guangzhou Dongfang vs. China State Construction | Guangzhou Dongfang vs. China Merchants Shekou | Guangzhou Dongfang vs. Huafa Industrial Co | Guangzhou Dongfang vs. China International Capital |
| Hunan Investment vs. Cultural Investment Holdings | Hunan Investment vs. Gome Telecom Equipment | Hunan Investment vs. Bus Online Co | Hunan Investment vs. Holitech Technology Co |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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