Correlation Between Linzhou Heavy and Huatian Hotel
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By analyzing existing cross correlation between Linzhou Heavy Machinery and Huatian Hotel Group, you can compare the effects of market volatilities on Linzhou Heavy and Huatian Hotel 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 Linzhou Heavy with a short position of Huatian Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Linzhou Heavy and Huatian Hotel.
Diversification Opportunities for Linzhou Heavy and Huatian Hotel
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Linzhou and Huatian is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Linzhou Heavy Machinery and Huatian Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huatian Hotel Group and Linzhou Heavy 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 Linzhou Heavy Machinery are associated (or correlated) with Huatian Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huatian Hotel Group has no effect on the direction of Linzhou Heavy i.e., Linzhou Heavy and Huatian Hotel go up and down completely randomly.
Pair Corralation between Linzhou Heavy and Huatian Hotel
Assuming the 90 days trading horizon Linzhou Heavy Machinery is expected to generate 1.0 times more return on investment than Huatian Hotel. However, Linzhou Heavy Machinery is 1.0 times less risky than Huatian Hotel. It trades about 0.24 of its potential returns per unit of risk. Huatian Hotel Group is currently generating about 0.1 per unit of risk. If you would invest 357.00 in Linzhou Heavy Machinery on November 6, 2024 and sell it today you would earn a total of 26.00 from holding Linzhou Heavy Machinery or generate 7.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Linzhou Heavy Machinery vs. Huatian Hotel Group
Performance |
| Timeline |
| Linzhou Heavy Machinery |
| Huatian Hotel Group |
Linzhou Heavy and Huatian Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Linzhou Heavy and Huatian Hotel
The main advantage of trading using opposite Linzhou Heavy and Huatian Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Linzhou Heavy position performs unexpectedly, Huatian Hotel 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 Huatian Hotel will offset losses from the drop in Huatian Hotel's long position.| Linzhou Heavy vs. Jinling Hotel Corp | Linzhou Heavy vs. SSAW Hotels Resorts | Linzhou Heavy vs. Chongqing Brewery Co | Linzhou Heavy vs. Yan Tai Shuang |
| Huatian Hotel vs. Shenzhen Silver Basis | Huatian Hotel vs. Hangzhou Pinming Software | Huatian Hotel vs. Beijing Baolande Software | Huatian Hotel vs. GuoChuang Software 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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