Correlation Between Guangzhou Dongfang and Guangzhou Risong
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By analyzing existing cross correlation between Guangzhou Dongfang Hotel and Guangzhou Risong Intelligent, you can compare the effects of market volatilities on Guangzhou Dongfang and Guangzhou Risong 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 Guangzhou Risong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Dongfang and Guangzhou Risong.
Diversification Opportunities for Guangzhou Dongfang and Guangzhou Risong
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Guangzhou and Guangzhou is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Dongfang Hotel and Guangzhou Risong Intelligent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Risong Int 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 Guangzhou Risong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Risong Int has no effect on the direction of Guangzhou Dongfang i.e., Guangzhou Dongfang and Guangzhou Risong go up and down completely randomly.
Pair Corralation between Guangzhou Dongfang and Guangzhou Risong
Assuming the 90 days trading horizon Guangzhou Dongfang is expected to generate 9.41 times less return on investment than Guangzhou Risong. But when comparing it to its historical volatility, Guangzhou Dongfang Hotel is 1.44 times less risky than Guangzhou Risong. It trades about 0.01 of its potential returns per unit of risk. Guangzhou Risong Intelligent is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,633 in Guangzhou Risong Intelligent on December 5, 2024 and sell it today you would earn a total of 2,697 from holding Guangzhou Risong Intelligent or generate 102.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Guangzhou Dongfang Hotel vs. Guangzhou Risong Intelligent
Performance |
| Timeline |
| Guangzhou Dongfang Hotel |
| Guangzhou Risong Int |
Guangzhou Dongfang and Guangzhou Risong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Dongfang and Guangzhou Risong
The main advantage of trading using opposite Guangzhou Dongfang and Guangzhou Risong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Dongfang position performs unexpectedly, Guangzhou Risong 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 Guangzhou Risong will offset losses from the drop in Guangzhou Risong's long position.| Guangzhou Dongfang vs. Tibet Huayu Mining | ||
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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