Correlation Between Guangzhou Dongfang and Hangzhou Arcvideo
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By analyzing existing cross correlation between Guangzhou Dongfang Hotel and Hangzhou Arcvideo Technology, you can compare the effects of market volatilities on Guangzhou Dongfang and Hangzhou Arcvideo 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 Hangzhou Arcvideo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Dongfang and Hangzhou Arcvideo.
Diversification Opportunities for Guangzhou Dongfang and Hangzhou Arcvideo
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and Hangzhou is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Dongfang Hotel and Hangzhou Arcvideo Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hangzhou Arcvideo 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 Hangzhou Arcvideo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hangzhou Arcvideo has no effect on the direction of Guangzhou Dongfang i.e., Guangzhou Dongfang and Hangzhou Arcvideo go up and down completely randomly.
Pair Corralation between Guangzhou Dongfang and Hangzhou Arcvideo
Assuming the 90 days trading horizon Guangzhou Dongfang is expected to generate 6.37 times less return on investment than Hangzhou Arcvideo. But when comparing it to its historical volatility, Guangzhou Dongfang Hotel is 1.69 times less risky than Hangzhou Arcvideo. It trades about 0.0 of its potential returns per unit of risk. Hangzhou Arcvideo Technology is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,301 in Hangzhou Arcvideo Technology on October 25, 2024 and sell it today you would lose (761.00) from holding Hangzhou Arcvideo Technology or give up 23.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Dongfang Hotel vs. Hangzhou Arcvideo Technology
Performance |
| Timeline |
| Guangzhou Dongfang Hotel |
| Hangzhou Arcvideo |
Guangzhou Dongfang and Hangzhou Arcvideo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Dongfang and Hangzhou Arcvideo
The main advantage of trading using opposite Guangzhou Dongfang and Hangzhou Arcvideo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Dongfang position performs unexpectedly, Hangzhou Arcvideo 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 Hangzhou Arcvideo will offset losses from the drop in Hangzhou Arcvideo's long position.| Guangzhou Dongfang vs. PetroChina Co Ltd | Guangzhou Dongfang vs. Gansu Jiu Steel | Guangzhou Dongfang vs. Ming Yang Smart | Guangzhou Dongfang vs. Aba Chemicals Corp |
| Hangzhou Arcvideo vs. Kweichow Moutai Co | Hangzhou Arcvideo vs. NAURA Technology Group | Hangzhou Arcvideo vs. APT Medical | Hangzhou Arcvideo vs. BYD 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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