Correlation Between Zoje Resources and Guangzhou Dongfang
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By analyzing existing cross correlation between Zoje Resources Investment and Guangzhou Dongfang Hotel, you can compare the effects of market volatilities on Zoje Resources 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 Zoje Resources with a short position of Guangzhou Dongfang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zoje Resources and Guangzhou Dongfang.
Diversification Opportunities for Zoje Resources and Guangzhou Dongfang
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zoje and Guangzhou is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Zoje Resources Investment 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 Zoje Resources 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 Zoje Resources Investment 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 Zoje Resources i.e., Zoje Resources and Guangzhou Dongfang go up and down completely randomly.
Pair Corralation between Zoje Resources and Guangzhou Dongfang
Assuming the 90 days trading horizon Zoje Resources Investment is expected to generate 1.24 times more return on investment than Guangzhou Dongfang. However, Zoje Resources is 1.24 times more volatile than Guangzhou Dongfang Hotel. It trades about 0.07 of its potential returns per unit of risk. Guangzhou Dongfang Hotel is currently generating about 0.01 per unit of risk. If you would invest 109.00 in Zoje Resources Investment on August 29, 2024 and sell it today you would earn a total of 131.00 from holding Zoje Resources Investment or generate 120.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zoje Resources Investment vs. Guangzhou Dongfang Hotel
Performance |
| Timeline |
| Zoje Resources Investment |
| Guangzhou Dongfang Hotel |
Zoje Resources and Guangzhou Dongfang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zoje Resources and Guangzhou Dongfang
The main advantage of trading using opposite Zoje Resources and Guangzhou Dongfang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zoje Resources 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.| Zoje Resources vs. Biwin Storage Technology | Zoje Resources vs. PetroChina Co Ltd | Zoje Resources vs. Industrial and Commercial | Zoje Resources vs. China Construction Bank |
| Guangzhou Dongfang vs. Biwin Storage Technology | Guangzhou Dongfang vs. PetroChina Co Ltd | Guangzhou Dongfang vs. Industrial and Commercial | Guangzhou Dongfang 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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