Correlation Between Dalian Zeus and Guangzhou Restaurants
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By analyzing existing cross correlation between Dalian Zeus Entertainment and Guangzhou Restaurants Group, you can compare the effects of market volatilities on Dalian Zeus and Guangzhou Restaurants 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 Dalian Zeus with a short position of Guangzhou Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dalian Zeus and Guangzhou Restaurants.
Diversification Opportunities for Dalian Zeus and Guangzhou Restaurants
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dalian and Guangzhou is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Dalian Zeus Entertainment and Guangzhou Restaurants Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Restaurants and Dalian Zeus 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 Dalian Zeus Entertainment are associated (or correlated) with Guangzhou Restaurants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Restaurants has no effect on the direction of Dalian Zeus i.e., Dalian Zeus and Guangzhou Restaurants go up and down completely randomly.
Pair Corralation between Dalian Zeus and Guangzhou Restaurants
Assuming the 90 days trading horizon Dalian Zeus Entertainment is expected to generate 2.03 times more return on investment than Guangzhou Restaurants. However, Dalian Zeus is 2.03 times more volatile than Guangzhou Restaurants Group. It trades about 0.04 of its potential returns per unit of risk. Guangzhou Restaurants Group is currently generating about -0.04 per unit of risk. If you would invest 408.00 in Dalian Zeus Entertainment on August 27, 2024 and sell it today you would earn a total of 142.00 from holding Dalian Zeus Entertainment or generate 34.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dalian Zeus Entertainment vs. Guangzhou Restaurants Group
Performance |
| Timeline |
| Dalian Zeus Entertainment |
| Guangzhou Restaurants |
Dalian Zeus and Guangzhou Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dalian Zeus and Guangzhou Restaurants
The main advantage of trading using opposite Dalian Zeus and Guangzhou Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dalian Zeus position performs unexpectedly, Guangzhou Restaurants 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 Restaurants will offset losses from the drop in Guangzhou Restaurants' long position.| Dalian Zeus vs. Ming Yang Smart | Dalian Zeus vs. 159681 | Dalian Zeus vs. 159005 | Dalian Zeus vs. Loctek Ergonomic Technology |
| Guangzhou Restaurants vs. AVCON Information Tech | Guangzhou Restaurants vs. Digital China Information | Guangzhou Restaurants vs. Datang HuaYin Electric | Guangzhou Restaurants vs. Emdoor Information 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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