Correlation Between Guangzhou Seagull and Guangzhou Dongfang
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By analyzing existing cross correlation between Guangzhou Seagull Kitchen and Guangzhou Dongfang Hotel, you can compare the effects of market volatilities on Guangzhou Seagull 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 Guangzhou Seagull with a short position of Guangzhou Dongfang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Seagull and Guangzhou Dongfang.
Diversification Opportunities for Guangzhou Seagull and Guangzhou Dongfang
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangzhou and Guangzhou is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Seagull Kitchen 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 Guangzhou Seagull 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 Guangzhou Seagull Kitchen 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 Guangzhou Seagull i.e., Guangzhou Seagull and Guangzhou Dongfang go up and down completely randomly.
Pair Corralation between Guangzhou Seagull and Guangzhou Dongfang
Assuming the 90 days trading horizon Guangzhou Seagull Kitchen is expected to under-perform the Guangzhou Dongfang. In addition to that, Guangzhou Seagull is 1.36 times more volatile than Guangzhou Dongfang Hotel. It trades about -0.18 of its total potential returns per unit of risk. Guangzhou Dongfang Hotel is currently generating about -0.22 per unit of volatility. 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 | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Seagull Kitchen vs. Guangzhou Dongfang Hotel
Performance |
| Timeline |
| Guangzhou Seagull Kitchen |
| Guangzhou Dongfang Hotel |
Guangzhou Seagull and Guangzhou Dongfang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Seagull and Guangzhou Dongfang
The main advantage of trading using opposite Guangzhou Seagull and Guangzhou Dongfang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Seagull 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.| Guangzhou Seagull vs. Jiahe Foods Industry | Guangzhou Seagull vs. Chongqing Changan Automobile | Guangzhou Seagull vs. Beijing Sanyuan Foods | Guangzhou Seagull vs. HaiXin Foods Co |
| 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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