Correlation Between Guangzhou Dongfang and Tianshui Huatian
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By analyzing existing cross correlation between Guangzhou Dongfang Hotel and Tianshui Huatian Technology, you can compare the effects of market volatilities on Guangzhou Dongfang and Tianshui Huatian 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 Tianshui Huatian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Dongfang and Tianshui Huatian.
Diversification Opportunities for Guangzhou Dongfang and Tianshui Huatian
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guangzhou and Tianshui is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Dongfang Hotel and Tianshui Huatian Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianshui Huatian Tec 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 Tianshui Huatian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianshui Huatian Tec has no effect on the direction of Guangzhou Dongfang i.e., Guangzhou Dongfang and Tianshui Huatian go up and down completely randomly.
Pair Corralation between Guangzhou Dongfang and Tianshui Huatian
Assuming the 90 days trading horizon Guangzhou Dongfang is expected to generate 1.37 times less return on investment than Tianshui Huatian. In addition to that, Guangzhou Dongfang is 1.05 times more volatile than Tianshui Huatian Technology. It trades about 0.16 of its total potential returns per unit of risk. Tianshui Huatian Technology is currently generating about 0.23 per unit of volatility. If you would invest 1,055 in Tianshui Huatian Technology on November 7, 2024 and sell it today you would earn a total of 71.00 from holding Tianshui Huatian Technology or generate 6.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Dongfang Hotel vs. Tianshui Huatian Technology
Performance |
| Timeline |
| Guangzhou Dongfang Hotel |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Tianshui Huatian Tec |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Guangzhou Dongfang and Tianshui Huatian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Dongfang and Tianshui Huatian
The main advantage of trading using opposite Guangzhou Dongfang and Tianshui Huatian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Dongfang position performs unexpectedly, Tianshui Huatian 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 Tianshui Huatian will offset losses from the drop in Tianshui Huatian's long position.| Guangzhou Dongfang vs. Zhejiang Zanyu Technology | Guangzhou Dongfang vs. Shanghai SK Automation | Guangzhou Dongfang vs. ShenZhen YUTO Packaging | Guangzhou Dongfang vs. Lao Feng Xiang |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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