Correlation Between Hunan Investment and Huatian Hotel
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By analyzing existing cross correlation between Hunan Investment Group and Huatian Hotel Group, you can compare the effects of market volatilities on Hunan Investment and Huatian Hotel 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 Hunan Investment with a short position of Huatian Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunan Investment and Huatian Hotel.
Diversification Opportunities for Hunan Investment and Huatian Hotel
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hunan and Huatian is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Hunan Investment Group and Huatian Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huatian Hotel Group and Hunan Investment 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 Hunan Investment Group are associated (or correlated) with Huatian Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huatian Hotel Group has no effect on the direction of Hunan Investment i.e., Hunan Investment and Huatian Hotel go up and down completely randomly.
Pair Corralation between Hunan Investment and Huatian Hotel
Assuming the 90 days trading horizon Hunan Investment Group is expected to generate 1.17 times more return on investment than Huatian Hotel. However, Hunan Investment is 1.17 times more volatile than Huatian Hotel Group. It trades about 0.23 of its potential returns per unit of risk. Huatian Hotel Group is currently generating about 0.06 per unit of risk. If you would invest 499.00 in Hunan Investment Group on September 5, 2024 and sell it today you would earn a total of 99.00 from holding Hunan Investment Group or generate 19.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hunan Investment Group vs. Huatian Hotel Group
Performance |
| Timeline |
| Hunan Investment |
| Huatian Hotel Group |
Hunan Investment and Huatian Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hunan Investment and Huatian Hotel
The main advantage of trading using opposite Hunan Investment and Huatian Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunan Investment position performs unexpectedly, Huatian Hotel 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 Huatian Hotel will offset losses from the drop in Huatian Hotel's long position.| Hunan Investment vs. Cambricon Technologies Corp | Hunan Investment vs. Loongson Technology Corp | Hunan Investment vs. Shenzhen Fortune Trend | Hunan Investment vs. Chongqing Road Bridge |
| Huatian Hotel vs. Biwin Storage Technology | Huatian Hotel vs. PetroChina Co Ltd | Huatian Hotel vs. Industrial and Commercial | Huatian Hotel vs. China Construction Bank |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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