Correlation Between Guangzhou Dongfang and Zoje Resources
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By analyzing existing cross correlation between Guangzhou Dongfang Hotel and Zoje Resources Investment, you can compare the effects of market volatilities on Guangzhou Dongfang and Zoje Resources 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 Zoje Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Dongfang and Zoje Resources.
Diversification Opportunities for Guangzhou Dongfang and Zoje Resources
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangzhou and Zoje is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Dongfang Hotel and Zoje Resources Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoje Resources 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 Zoje Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoje Resources Investment has no effect on the direction of Guangzhou Dongfang i.e., Guangzhou Dongfang and Zoje Resources go up and down completely randomly.
Pair Corralation between Guangzhou Dongfang and Zoje Resources
Assuming the 90 days trading horizon Guangzhou Dongfang Hotel is expected to under-perform the Zoje Resources. But the stock apears to be less risky and, when comparing its historical volatility, Guangzhou Dongfang Hotel is 1.78 times less risky than Zoje Resources. The stock trades about -0.02 of its potential returns per unit of risk. The Zoje Resources Investment is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 201.00 in Zoje Resources Investment on August 29, 2024 and sell it today you would earn a total of 39.00 from holding Zoje Resources Investment or generate 19.4% 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. Zoje Resources Investment
Performance |
| Timeline |
| Guangzhou Dongfang Hotel |
| Zoje Resources Investment |
Guangzhou Dongfang and Zoje Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Dongfang and Zoje Resources
The main advantage of trading using opposite Guangzhou Dongfang and Zoje Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Dongfang position performs unexpectedly, Zoje Resources 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 Zoje Resources will offset losses from the drop in Zoje Resources' long position.| Guangzhou Dongfang vs. Agricultural Bank of | Guangzhou Dongfang vs. Industrial and Commercial | Guangzhou Dongfang vs. Bank of China | Guangzhou Dongfang vs. China Construction Bank |
| Zoje Resources vs. Eastern Communications Co | Zoje Resources vs. Haima Automobile Group | Zoje Resources vs. Eastroc Beverage Group | Zoje Resources vs. Anji Foodstuff 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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