Correlation Between HaiXin Foods and Guangzhou Restaurants
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By analyzing existing cross correlation between HaiXin Foods Co and Guangzhou Restaurants Group, you can compare the effects of market volatilities on HaiXin Foods 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 HaiXin Foods with a short position of Guangzhou Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of HaiXin Foods and Guangzhou Restaurants.
Diversification Opportunities for HaiXin Foods and Guangzhou Restaurants
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HaiXin and Guangzhou is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding HaiXin Foods Co and Guangzhou Restaurants Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Restaurants and HaiXin Foods 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 HaiXin Foods Co 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 HaiXin Foods i.e., HaiXin Foods and Guangzhou Restaurants go up and down completely randomly.
Pair Corralation between HaiXin Foods and Guangzhou Restaurants
Assuming the 90 days trading horizon HaiXin Foods Co is expected to generate 1.34 times more return on investment than Guangzhou Restaurants. However, HaiXin Foods is 1.34 times more volatile than Guangzhou Restaurants Group. It trades about 0.06 of its potential returns per unit of risk. Guangzhou Restaurants Group is currently generating about -0.01 per unit of risk. If you would invest 386.00 in HaiXin Foods Co on September 2, 2024 and sell it today you would earn a total of 75.00 from holding HaiXin Foods Co or generate 19.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HaiXin Foods Co vs. Guangzhou Restaurants Group
Performance |
| Timeline |
| HaiXin Foods |
| Guangzhou Restaurants |
HaiXin Foods and Guangzhou Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HaiXin Foods and Guangzhou Restaurants
The main advantage of trading using opposite HaiXin Foods and Guangzhou Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HaiXin Foods 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.| HaiXin Foods vs. Nanjing Putian Telecommunications | HaiXin Foods vs. Shenzhen Hifuture Electric | HaiXin Foods vs. Tianjin Realty Development | HaiXin Foods vs. Shenyang Huitian Thermal |
| Guangzhou Restaurants vs. China State Construction | Guangzhou Restaurants vs. Poly Real Estate | Guangzhou Restaurants vs. China Vanke Co | Guangzhou Restaurants vs. China Merchants Shekou |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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