Correlation Between Hunan Investment and BTG Hotels
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By analyzing existing cross correlation between Hunan Investment Group and BTG Hotels Group, you can compare the effects of market volatilities on Hunan Investment and BTG Hotels 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 BTG Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunan Investment and BTG Hotels.
Diversification Opportunities for Hunan Investment and BTG Hotels
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hunan and BTG is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Hunan Investment Group and BTG Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTG Hotels 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 BTG Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTG Hotels Group has no effect on the direction of Hunan Investment i.e., Hunan Investment and BTG Hotels go up and down completely randomly.
Pair Corralation between Hunan Investment and BTG Hotels
Assuming the 90 days trading horizon Hunan Investment Group is expected to generate 1.16 times more return on investment than BTG Hotels. However, Hunan Investment is 1.16 times more volatile than BTG Hotels Group. It trades about 0.02 of its potential returns per unit of risk. BTG Hotels Group is currently generating about -0.04 per unit of risk. If you would invest 522.00 in Hunan Investment Group on September 3, 2024 and sell it today you would earn a total of 59.00 from holding Hunan Investment Group or generate 11.3% 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. BTG Hotels Group
Performance |
| Timeline |
| Hunan Investment |
| BTG Hotels Group |
Hunan Investment and BTG Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hunan Investment and BTG Hotels
The main advantage of trading using opposite Hunan Investment and BTG Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunan Investment position performs unexpectedly, BTG Hotels 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 BTG Hotels will offset losses from the drop in BTG Hotels' long position.| Hunan Investment vs. Xinke Material | Hunan Investment vs. King Strong New Material | Hunan Investment vs. Advanced Technology Materials | Hunan Investment vs. Dhc Software Co |
| BTG Hotels vs. PetroChina Co Ltd | BTG Hotels vs. China Mobile Limited | BTG Hotels vs. Industrial and Commercial | BTG Hotels vs. China Life Insurance |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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