Correlation Between Beijing Lanxum and Guangzhou Dongfang
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By analyzing existing cross correlation between Beijing Lanxum Tech and Guangzhou Dongfang Hotel, you can compare the effects of market volatilities on Beijing Lanxum 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 Beijing Lanxum with a short position of Guangzhou Dongfang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Lanxum and Guangzhou Dongfang.
Diversification Opportunities for Beijing Lanxum and Guangzhou Dongfang
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Beijing and Guangzhou is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Lanxum Tech 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 Beijing Lanxum 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 Beijing Lanxum Tech 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 Beijing Lanxum i.e., Beijing Lanxum and Guangzhou Dongfang go up and down completely randomly.
Pair Corralation between Beijing Lanxum and Guangzhou Dongfang
Assuming the 90 days trading horizon Beijing Lanxum Tech is expected to under-perform the Guangzhou Dongfang. In addition to that, Beijing Lanxum is 5.46 times more volatile than Guangzhou Dongfang Hotel. It trades about -0.08 of its total potential returns per unit of risk. Guangzhou Dongfang Hotel is currently generating about 0.08 per unit of volatility. If you would invest 1,003 in Guangzhou Dongfang Hotel on September 2, 2024 and sell it today you would earn a total of 27.00 from holding Guangzhou Dongfang Hotel or generate 2.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Lanxum Tech vs. Guangzhou Dongfang Hotel
Performance |
| Timeline |
| Beijing Lanxum Tech |
| Guangzhou Dongfang Hotel |
Beijing Lanxum and Guangzhou Dongfang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Lanxum and Guangzhou Dongfang
The main advantage of trading using opposite Beijing Lanxum and Guangzhou Dongfang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Lanxum 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.| Beijing Lanxum vs. China Minmetals Rare | Beijing Lanxum vs. Tongyu Communication | Beijing Lanxum vs. Shenzhen Shenbao Industrial | Beijing Lanxum vs. Haima Automobile Group |
| Guangzhou Dongfang vs. Cultural Investment Holdings | Guangzhou Dongfang vs. Gome Telecom Equipment | Guangzhou Dongfang vs. Bus Online Co | Guangzhou Dongfang vs. Holitech Technology 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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