Correlation Between Guangzhou Dongfang and Beijing Baolande
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By analyzing existing cross correlation between Guangzhou Dongfang Hotel and Beijing Baolande Software, you can compare the effects of market volatilities on Guangzhou Dongfang and Beijing Baolande 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 Beijing Baolande. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Dongfang and Beijing Baolande.
Diversification Opportunities for Guangzhou Dongfang and Beijing Baolande
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guangzhou and Beijing is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Dongfang Hotel and Beijing Baolande Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Baolande Software 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 Beijing Baolande. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Baolande Software has no effect on the direction of Guangzhou Dongfang i.e., Guangzhou Dongfang and Beijing Baolande go up and down completely randomly.
Pair Corralation between Guangzhou Dongfang and Beijing Baolande
Assuming the 90 days trading horizon Guangzhou Dongfang Hotel is expected to generate 0.66 times more return on investment than Beijing Baolande. However, Guangzhou Dongfang Hotel is 1.52 times less risky than Beijing Baolande. It trades about -0.07 of its potential returns per unit of risk. Beijing Baolande Software is currently generating about -0.06 per unit of risk. If you would invest 1,030 in Guangzhou Dongfang Hotel on October 30, 2024 and sell it today you would lose (85.00) from holding Guangzhou Dongfang Hotel or give up 8.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Dongfang Hotel vs. Beijing Baolande Software
Performance |
| Timeline |
| Guangzhou Dongfang Hotel |
| Beijing Baolande Software |
Guangzhou Dongfang and Beijing Baolande Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Dongfang and Beijing Baolande
The main advantage of trading using opposite Guangzhou Dongfang and Beijing Baolande positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Dongfang position performs unexpectedly, Beijing Baolande 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 Beijing Baolande will offset losses from the drop in Beijing Baolande's long position.| Guangzhou Dongfang vs. Shanghai Phichem Material | Guangzhou Dongfang vs. Guocheng Mining Co | Guangzhou Dongfang vs. Chongqing Sulian Plastic | Guangzhou Dongfang vs. Bosera CMSK Industrial |
| Beijing Baolande vs. Bank of China | Beijing Baolande vs. Kweichow Moutai Co | Beijing Baolande vs. PetroChina Co Ltd | Beijing Baolande vs. Bank of Communications |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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