Correlation Between Guangzhou Dongfang and Jiangsu Phoenix
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By analyzing existing cross correlation between Guangzhou Dongfang Hotel and Jiangsu Phoenix Publishing, you can compare the effects of market volatilities on Guangzhou Dongfang and Jiangsu Phoenix 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 Jiangsu Phoenix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Dongfang and Jiangsu Phoenix.
Diversification Opportunities for Guangzhou Dongfang and Jiangsu Phoenix
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Guangzhou and Jiangsu is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Dongfang Hotel and Jiangsu Phoenix Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Phoenix Publ 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 Jiangsu Phoenix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Phoenix Publ has no effect on the direction of Guangzhou Dongfang i.e., Guangzhou Dongfang and Jiangsu Phoenix go up and down completely randomly.
Pair Corralation between Guangzhou Dongfang and Jiangsu Phoenix
Assuming the 90 days trading horizon Guangzhou Dongfang Hotel is expected to under-perform the Jiangsu Phoenix. In addition to that, Guangzhou Dongfang is 1.13 times more volatile than Jiangsu Phoenix Publishing. It trades about 0.0 of its total potential returns per unit of risk. Jiangsu Phoenix Publishing is currently generating about 0.04 per unit of volatility. If you would invest 745.00 in Jiangsu Phoenix Publishing on October 12, 2024 and sell it today you would earn a total of 305.00 from holding Jiangsu Phoenix Publishing or generate 40.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Dongfang Hotel vs. Jiangsu Phoenix Publishing
Performance |
| Timeline |
| Guangzhou Dongfang Hotel |
| Jiangsu Phoenix Publ |
Guangzhou Dongfang and Jiangsu Phoenix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Dongfang and Jiangsu Phoenix
The main advantage of trading using opposite Guangzhou Dongfang and Jiangsu Phoenix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Dongfang position performs unexpectedly, Jiangsu Phoenix 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 Jiangsu Phoenix will offset losses from the drop in Jiangsu Phoenix's long position.The idea behind Guangzhou Dongfang Hotel and Jiangsu Phoenix Publishing pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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