Correlation Between FarGlory Hotel and Chinese Maritime
Can any of the company-specific risk be diversified away by investing in both FarGlory Hotel and Chinese Maritime at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining FarGlory Hotel and Chinese Maritime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FarGlory Hotel Co and Chinese Maritime Transport, you can compare the effects of market volatilities on FarGlory Hotel and Chinese Maritime 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 FarGlory Hotel with a short position of Chinese Maritime. Check out your portfolio center. Please also check ongoing floating volatility patterns of FarGlory Hotel and Chinese Maritime.
Diversification Opportunities for FarGlory Hotel and Chinese Maritime
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between FarGlory and Chinese is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding FarGlory Hotel Co and Chinese Maritime Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chinese Maritime Tra and FarGlory Hotel 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 FarGlory Hotel Co are associated (or correlated) with Chinese Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chinese Maritime Tra has no effect on the direction of FarGlory Hotel i.e., FarGlory Hotel and Chinese Maritime go up and down completely randomly.
Pair Corralation between FarGlory Hotel and Chinese Maritime
Assuming the 90 days trading horizon FarGlory Hotel Co is expected to under-perform the Chinese Maritime. But the stock apears to be less risky and, when comparing its historical volatility, FarGlory Hotel Co is 1.12 times less risky than Chinese Maritime. The stock trades about -0.02 of its potential returns per unit of risk. The Chinese Maritime Transport is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,910 in Chinese Maritime Transport on October 28, 2024 and sell it today you would earn a total of 50.00 from holding Chinese Maritime Transport or generate 1.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FarGlory Hotel Co vs. Chinese Maritime Transport
Performance |
| Timeline |
| FarGlory Hotel |
| Chinese Maritime Tra |
FarGlory Hotel and Chinese Maritime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FarGlory Hotel and Chinese Maritime
The main advantage of trading using opposite FarGlory Hotel and Chinese Maritime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FarGlory Hotel position performs unexpectedly, Chinese Maritime 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 Chinese Maritime will offset losses from the drop in Chinese Maritime's long position.| FarGlory Hotel vs. Ambassador Hotel | FarGlory Hotel vs. First Hotel Co | FarGlory Hotel vs. FDC International Hotels | FarGlory Hotel vs. Leatec Fine Ceramics |
| Chinese Maritime vs. Chang Type Industrial | Chinese Maritime vs. Anderson Industrial Corp | Chinese Maritime vs. Klingon Aerospace | Chinese Maritime vs. Basso Industry Corp |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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