Correlation Between Beijing Shunxin and Guangzhou Dongfang
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By analyzing existing cross correlation between Beijing Shunxin Agriculture and Guangzhou Dongfang Hotel, you can compare the effects of market volatilities on Beijing Shunxin and Guangzhou Dongfang 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 Beijing Shunxin with a short position of Guangzhou Dongfang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Shunxin and Guangzhou Dongfang.
Diversification Opportunities for Beijing Shunxin and Guangzhou Dongfang
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and Guangzhou is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Shunxin Agriculture and Guangzhou Dongfang Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Dongfang Hotel and Beijing Shunxin 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 Beijing Shunxin Agriculture are associated (or correlated) with Guangzhou Dongfang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Dongfang Hotel has no effect on the direction of Beijing Shunxin i.e., Beijing Shunxin and Guangzhou Dongfang go up and down completely randomly.
Pair Corralation between Beijing Shunxin and Guangzhou Dongfang
Assuming the 90 days trading horizon Beijing Shunxin Agriculture is expected to under-perform the Guangzhou Dongfang. But the stock apears to be less risky and, when comparing its historical volatility, Beijing Shunxin Agriculture is 1.27 times less risky than Guangzhou Dongfang. The stock trades about -0.3 of its potential returns per unit of risk. The Guangzhou Dongfang Hotel is currently generating about -0.22 of returns per unit of risk over similar time horizon. If you would invest 1,059 in Guangzhou Dongfang Hotel on October 12, 2024 and sell it today you would lose (147.00) from holding Guangzhou Dongfang Hotel or give up 13.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Shunxin Agriculture vs. Guangzhou Dongfang Hotel
Performance |
| Timeline |
| Beijing Shunxin Agri |
| Guangzhou Dongfang Hotel |
Beijing Shunxin and Guangzhou Dongfang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Shunxin and Guangzhou Dongfang
The main advantage of trading using opposite Beijing Shunxin and Guangzhou Dongfang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Shunxin position performs unexpectedly, Guangzhou Dongfang 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 Dongfang will offset losses from the drop in Guangzhou Dongfang's long position.| Beijing Shunxin vs. Sunny Loan Top | Beijing Shunxin vs. HUAQIN TECHNOLOGY LTD | Beijing Shunxin vs. Changjiang Publishing Media | Beijing Shunxin vs. Thinkingdom Media Group |
| Guangzhou Dongfang vs. Shaanxi Meineng Clean | Guangzhou Dongfang vs. Rongcheer Industrial Technology | Guangzhou Dongfang vs. Western Metal Materials | Guangzhou Dongfang vs. Minmetals Capital Co |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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