Correlation Between Guangzhou Dongfang and Biwin Storage
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By analyzing existing cross correlation between Guangzhou Dongfang Hotel and Biwin Storage Technology, you can compare the effects of market volatilities on Guangzhou Dongfang and Biwin Storage 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 Biwin Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Dongfang and Biwin Storage.
Diversification Opportunities for Guangzhou Dongfang and Biwin Storage
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangzhou and Biwin is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Dongfang Hotel and Biwin Storage Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biwin Storage Technology 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 Biwin Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biwin Storage Technology has no effect on the direction of Guangzhou Dongfang i.e., Guangzhou Dongfang and Biwin Storage go up and down completely randomly.
Pair Corralation between Guangzhou Dongfang and Biwin Storage
Assuming the 90 days trading horizon Guangzhou Dongfang is expected to generate 2.81 times less return on investment than Biwin Storage. But when comparing it to its historical volatility, Guangzhou Dongfang Hotel is 2.11 times less risky than Biwin Storage. It trades about 0.1 of its potential returns per unit of risk. Biwin Storage Technology is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 4,376 in Biwin Storage Technology on August 25, 2024 and sell it today you would earn a total of 1,264 from holding Biwin Storage Technology or generate 28.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Dongfang Hotel vs. Biwin Storage Technology
Performance |
| Timeline |
| Guangzhou Dongfang Hotel |
| Biwin Storage Technology |
Guangzhou Dongfang and Biwin Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Dongfang and Biwin Storage
The main advantage of trading using opposite Guangzhou Dongfang and Biwin Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Dongfang position performs unexpectedly, Biwin Storage 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 Biwin Storage will offset losses from the drop in Biwin Storage's long position.| Guangzhou Dongfang vs. Biwin Storage Technology | Guangzhou Dongfang vs. PetroChina Co Ltd | Guangzhou Dongfang vs. Industrial and Commercial | Guangzhou Dongfang vs. China Construction Bank |
| Biwin Storage vs. Lutian Machinery Co | Biwin Storage vs. China Longyuan Power | Biwin Storage vs. Changshu Tongrun Auto | Biwin Storage 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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