Correlation Between Guangzhou Dongfang and RoadMain T
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By analyzing existing cross correlation between Guangzhou Dongfang Hotel and RoadMain T Co, you can compare the effects of market volatilities on Guangzhou Dongfang and RoadMain T 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 RoadMain T. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Dongfang and RoadMain T.
Diversification Opportunities for Guangzhou Dongfang and RoadMain T
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and RoadMain is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Dongfang Hotel and RoadMain T Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RoadMain T 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 RoadMain T. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RoadMain T has no effect on the direction of Guangzhou Dongfang i.e., Guangzhou Dongfang and RoadMain T go up and down completely randomly.
Pair Corralation between Guangzhou Dongfang and RoadMain T
Assuming the 90 days trading horizon Guangzhou Dongfang Hotel is expected to under-perform the RoadMain T. But the stock apears to be less risky and, when comparing its historical volatility, Guangzhou Dongfang Hotel is 1.2 times less risky than RoadMain T. The stock trades about 0.0 of its potential returns per unit of risk. The RoadMain T Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,541 in RoadMain T Co on October 27, 2024 and sell it today you would earn a total of 305.00 from holding RoadMain T Co or generate 12.0% 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. RoadMain T Co
Performance |
| Timeline |
| Guangzhou Dongfang Hotel |
| RoadMain T |
Guangzhou Dongfang and RoadMain T Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Dongfang and RoadMain T
The main advantage of trading using opposite Guangzhou Dongfang and RoadMain T positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Dongfang position performs unexpectedly, RoadMain T 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 RoadMain T will offset losses from the drop in RoadMain T's long position.| Guangzhou Dongfang vs. Holitech Technology Co | Guangzhou Dongfang vs. China Publishing Media | Guangzhou Dongfang vs. COL Digital Publishing | Guangzhou Dongfang vs. Kangping Technology Co |
| RoadMain T vs. Agricultural Bank of | RoadMain T vs. Industrial and Commercial | RoadMain T vs. Bank of China | RoadMain T vs. PetroChina Co Ltd |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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