Correlation Between Guangzhou Dongfang and Chongqing Brewery
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By analyzing existing cross correlation between Guangzhou Dongfang Hotel and Chongqing Brewery Co, you can compare the effects of market volatilities on Guangzhou Dongfang and Chongqing Brewery 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 Chongqing Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Dongfang and Chongqing Brewery.
Diversification Opportunities for Guangzhou Dongfang and Chongqing Brewery
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and Chongqing is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Dongfang Hotel and Chongqing Brewery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Brewery 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 Chongqing Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Brewery has no effect on the direction of Guangzhou Dongfang i.e., Guangzhou Dongfang and Chongqing Brewery go up and down completely randomly.
Pair Corralation between Guangzhou Dongfang and Chongqing Brewery
Assuming the 90 days trading horizon Guangzhou Dongfang Hotel is expected to generate 1.45 times more return on investment than Chongqing Brewery. However, Guangzhou Dongfang is 1.45 times more volatile than Chongqing Brewery Co. It trades about 0.03 of its potential returns per unit of risk. Chongqing Brewery Co is currently generating about -0.03 per unit of risk. If you would invest 852.00 in Guangzhou Dongfang Hotel on November 6, 2024 and sell it today you would earn a total of 93.00 from holding Guangzhou Dongfang Hotel or generate 10.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Dongfang Hotel vs. Chongqing Brewery Co
Performance |
| Timeline |
| Guangzhou Dongfang Hotel |
| Chongqing Brewery |
Guangzhou Dongfang and Chongqing Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Dongfang and Chongqing Brewery
The main advantage of trading using opposite Guangzhou Dongfang and Chongqing Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Dongfang position performs unexpectedly, Chongqing Brewery 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 Chongqing Brewery will offset losses from the drop in Chongqing Brewery's long position.| Guangzhou Dongfang vs. Hubei Geoway Investment | Guangzhou Dongfang vs. Impulse Qingdao Health | Guangzhou Dongfang vs. Beijing Kingsoft Office | Guangzhou Dongfang vs. Huizhou Speed Wireless |
| Chongqing Brewery vs. Heren Health Co | Chongqing Brewery vs. Konfoong Materials International | Chongqing Brewery vs. Advanced Technology Materials | Chongqing Brewery vs. Shenzhen Cotran New |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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