Correlation Between Tianshui Huatian and Guangzhou Dongfang
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By analyzing existing cross correlation between Tianshui Huatian Technology and Guangzhou Dongfang Hotel, you can compare the effects of market volatilities on Tianshui Huatian 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 Tianshui Huatian with a short position of Guangzhou Dongfang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianshui Huatian and Guangzhou Dongfang.
Diversification Opportunities for Tianshui Huatian and Guangzhou Dongfang
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tianshui and Guangzhou is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Tianshui Huatian Technology 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 Tianshui Huatian 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 Tianshui Huatian Technology 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 Tianshui Huatian i.e., Tianshui Huatian and Guangzhou Dongfang go up and down completely randomly.
Pair Corralation between Tianshui Huatian and Guangzhou Dongfang
Assuming the 90 days trading horizon Tianshui Huatian Technology is expected to generate 0.95 times more return on investment than Guangzhou Dongfang. However, Tianshui Huatian Technology is 1.05 times less risky than Guangzhou Dongfang. It trades about 0.23 of its potential returns per unit of risk. Guangzhou Dongfang Hotel is currently generating about 0.16 per unit of risk. If you would invest 1,055 in Tianshui Huatian Technology on November 7, 2024 and sell it today you would earn a total of 71.00 from holding Tianshui Huatian Technology or generate 6.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tianshui Huatian Technology vs. Guangzhou Dongfang Hotel
Performance |
| Timeline |
| Tianshui Huatian Tec |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Guangzhou Dongfang Hotel |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Tianshui Huatian and Guangzhou Dongfang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianshui Huatian and Guangzhou Dongfang
The main advantage of trading using opposite Tianshui Huatian and Guangzhou Dongfang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianshui Huatian 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.The idea behind Tianshui Huatian Technology and Guangzhou Dongfang Hotel pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Guangzhou Dongfang vs. Zhejiang Zanyu Technology | Guangzhou Dongfang vs. Shanghai SK Automation | Guangzhou Dongfang vs. ShenZhen YUTO Packaging | Guangzhou Dongfang vs. Lao Feng Xiang |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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