Correlation Between Guangzhou Dongfang and Zhongtong Guomai
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By analyzing existing cross correlation between Guangzhou Dongfang Hotel and Zhongtong Guomai Communication, you can compare the effects of market volatilities on Guangzhou Dongfang and Zhongtong Guomai 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 Zhongtong Guomai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Dongfang and Zhongtong Guomai.
Diversification Opportunities for Guangzhou Dongfang and Zhongtong Guomai
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and Zhongtong is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Dongfang Hotel and Zhongtong Guomai Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongtong Guomai Com 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 Zhongtong Guomai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongtong Guomai Com has no effect on the direction of Guangzhou Dongfang i.e., Guangzhou Dongfang and Zhongtong Guomai go up and down completely randomly.
Pair Corralation between Guangzhou Dongfang and Zhongtong Guomai
Assuming the 90 days trading horizon Guangzhou Dongfang is expected to generate 4.57 times less return on investment than Zhongtong Guomai. But when comparing it to its historical volatility, Guangzhou Dongfang Hotel is 1.45 times less risky than Zhongtong Guomai. It trades about 0.06 of its potential returns per unit of risk. Zhongtong Guomai Communication is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 465.00 in Zhongtong Guomai Communication on September 1, 2024 and sell it today you would earn a total of 656.00 from holding Zhongtong Guomai Communication or generate 141.08% 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. Zhongtong Guomai Communication
Performance |
| Timeline |
| Guangzhou Dongfang Hotel |
| Zhongtong Guomai Com |
Guangzhou Dongfang and Zhongtong Guomai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Dongfang and Zhongtong Guomai
The main advantage of trading using opposite Guangzhou Dongfang and Zhongtong Guomai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Dongfang position performs unexpectedly, Zhongtong Guomai 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 Zhongtong Guomai will offset losses from the drop in Zhongtong Guomai's long position.| Guangzhou Dongfang vs. Songz Automobile Air | Guangzhou Dongfang vs. Zhejiang Publishing Media | Guangzhou Dongfang vs. Xinhua Winshare Publishing | Guangzhou Dongfang vs. Haima Automobile Group |
| Zhongtong Guomai vs. Chengdu B ray Media | Zhongtong Guomai vs. Mango Excellent Media | Zhongtong Guomai vs. Focus Media Information | Zhongtong Guomai vs. JiShi Media 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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