Correlation Between Guangzhou Dongfang and Penghua Shenzhen
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By analyzing existing cross correlation between Guangzhou Dongfang Hotel and Penghua Shenzhen Energy, you can compare the effects of market volatilities on Guangzhou Dongfang and Penghua Shenzhen 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 Penghua Shenzhen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Dongfang and Penghua Shenzhen.
Diversification Opportunities for Guangzhou Dongfang and Penghua Shenzhen
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Guangzhou and Penghua is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Dongfang Hotel and Penghua Shenzhen Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penghua Shenzhen Energy 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 Penghua Shenzhen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penghua Shenzhen Energy has no effect on the direction of Guangzhou Dongfang i.e., Guangzhou Dongfang and Penghua Shenzhen go up and down completely randomly.
Pair Corralation between Guangzhou Dongfang and Penghua Shenzhen
Assuming the 90 days trading horizon Guangzhou Dongfang Hotel is expected to under-perform the Penghua Shenzhen. In addition to that, Guangzhou Dongfang is 3.27 times more volatile than Penghua Shenzhen Energy. It trades about -0.03 of its total potential returns per unit of risk. Penghua Shenzhen Energy is currently generating about 0.18 per unit of volatility. If you would invest 588.00 in Penghua Shenzhen Energy on August 29, 2024 and sell it today you would earn a total of 13.00 from holding Penghua Shenzhen Energy or generate 2.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Dongfang Hotel vs. Penghua Shenzhen Energy
Performance |
| Timeline |
| Guangzhou Dongfang Hotel |
| Penghua Shenzhen Energy |
Guangzhou Dongfang and Penghua Shenzhen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Dongfang and Penghua Shenzhen
The main advantage of trading using opposite Guangzhou Dongfang and Penghua Shenzhen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Dongfang position performs unexpectedly, Penghua Shenzhen 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 Penghua Shenzhen will offset losses from the drop in Penghua Shenzhen's 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 |
| Penghua Shenzhen vs. Zhongtong Guomai Communication | Penghua Shenzhen vs. Bus Online Co | Penghua Shenzhen vs. Guangzhou Dongfang Hotel | Penghua Shenzhen vs. Eastern Communications 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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