Correlation Between Guangzhou Dongfang and Shandong Sino
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By analyzing existing cross correlation between Guangzhou Dongfang Hotel and Shandong Sino Agri United, you can compare the effects of market volatilities on Guangzhou Dongfang and Shandong Sino 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 Shandong Sino. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Dongfang and Shandong Sino.
Diversification Opportunities for Guangzhou Dongfang and Shandong Sino
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and Shandong is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Dongfang Hotel and Shandong Sino Agri United in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Sino Agri 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 Shandong Sino. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Sino Agri has no effect on the direction of Guangzhou Dongfang i.e., Guangzhou Dongfang and Shandong Sino go up and down completely randomly.
Pair Corralation between Guangzhou Dongfang and Shandong Sino
Assuming the 90 days trading horizon Guangzhou Dongfang Hotel is expected to generate 0.97 times more return on investment than Shandong Sino. However, Guangzhou Dongfang Hotel is 1.03 times less risky than Shandong Sino. It trades about 0.0 of its potential returns per unit of risk. Shandong Sino Agri United is currently generating about -0.03 per unit of risk. If you would invest 1,081 in Guangzhou Dongfang Hotel on October 9, 2024 and sell it today you would lose (179.00) from holding Guangzhou Dongfang Hotel or give up 16.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Dongfang Hotel vs. Shandong Sino Agri United
Performance |
| Timeline |
| Guangzhou Dongfang Hotel |
| Shandong Sino Agri |
Guangzhou Dongfang and Shandong Sino Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Dongfang and Shandong Sino
The main advantage of trading using opposite Guangzhou Dongfang and Shandong Sino positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Dongfang position performs unexpectedly, Shandong Sino 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 Shandong Sino will offset losses from the drop in Shandong Sino's long position.| Guangzhou Dongfang vs. Industrial and Commercial | Guangzhou Dongfang vs. Kweichow Moutai Co | Guangzhou Dongfang vs. Agricultural Bank of | Guangzhou Dongfang vs. China Mobile Limited |
| Shandong Sino vs. Sinocat Environmental Technology | Shandong Sino vs. Gansu Jiu Steel | Shandong Sino vs. Qiaoyin Environmental Tech | Shandong Sino vs. Hangzhou Guotai Environmental |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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