Correlation Between Shaanxi Energy and Huatian Hotel
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By analyzing existing cross correlation between Shaanxi Energy Investment and Huatian Hotel Group, you can compare the effects of market volatilities on Shaanxi Energy 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 Shaanxi Energy with a short position of Huatian Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaanxi Energy and Huatian Hotel.
Diversification Opportunities for Shaanxi Energy and Huatian Hotel
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shaanxi and Huatian is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Shaanxi Energy Investment 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 Shaanxi Energy 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 Shaanxi Energy Investment 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 Shaanxi Energy i.e., Shaanxi Energy and Huatian Hotel go up and down completely randomly.
Pair Corralation between Shaanxi Energy and Huatian Hotel
Assuming the 90 days trading horizon Shaanxi Energy Investment is expected to under-perform the Huatian Hotel. But the stock apears to be less risky and, when comparing its historical volatility, Shaanxi Energy Investment is 1.41 times less risky than Huatian Hotel. The stock trades about -0.03 of its potential returns per unit of risk. The Huatian Hotel Group is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 565.00 in Huatian Hotel Group on September 5, 2024 and sell it today you would lose (209.00) from holding Huatian Hotel Group or give up 36.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 84.28% |
| Values | Daily Returns |
Shaanxi Energy Investment vs. Huatian Hotel Group
Performance |
| Timeline |
| Shaanxi Energy Investment |
| Huatian Hotel Group |
Shaanxi Energy and Huatian Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaanxi Energy and Huatian Hotel
The main advantage of trading using opposite Shaanxi Energy and Huatian Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaanxi Energy 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.| Shaanxi Energy vs. Hengli Petrochemical Co | Shaanxi Energy vs. Chenzhou Jingui Silver | Shaanxi Energy vs. Chengtun Mining Group | Shaanxi Energy vs. Jiangsu Financial Leasing |
| 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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