Correlation Between China Longyuan and BTG Hotels
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By analyzing existing cross correlation between China Longyuan Power and BTG Hotels Group, you can compare the effects of market volatilities on China Longyuan 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 China Longyuan with a short position of BTG Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Longyuan and BTG Hotels.
Diversification Opportunities for China Longyuan and BTG Hotels
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and BTG is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding China Longyuan Power 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 China Longyuan 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 China Longyuan Power 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 China Longyuan i.e., China Longyuan and BTG Hotels go up and down completely randomly.
Pair Corralation between China Longyuan and BTG Hotels
Assuming the 90 days trading horizon China Longyuan Power is expected to under-perform the BTG Hotels. In addition to that, China Longyuan is 1.53 times more volatile than BTG Hotels Group. It trades about -0.07 of its total potential returns per unit of risk. BTG Hotels Group is currently generating about 0.04 per unit of volatility. If you would invest 1,429 in BTG Hotels Group on August 29, 2024 and sell it today you would earn a total of 16.00 from holding BTG Hotels Group or generate 1.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Longyuan Power vs. BTG Hotels Group
Performance |
| Timeline |
| China Longyuan Power |
| BTG Hotels Group |
China Longyuan and BTG Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Longyuan and BTG Hotels
The main advantage of trading using opposite China Longyuan and BTG Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Longyuan 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.| China Longyuan vs. Sinomach General Machinery | China Longyuan vs. Zijin Mining Group | China Longyuan vs. Zhongshan Public Utilities | China Longyuan vs. Shenzhen Zhongzhuang Construction |
| BTG Hotels vs. Biwin Storage Technology | BTG Hotels vs. PetroChina Co Ltd | BTG Hotels vs. Industrial and Commercial | BTG Hotels 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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