Correlation Between East Money and Huatian Hotel
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By analyzing existing cross correlation between East Money Information and Huatian Hotel Group, you can compare the effects of market volatilities on East Money 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 East Money with a short position of Huatian Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of East Money and Huatian Hotel.
Diversification Opportunities for East Money and Huatian Hotel
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between East and Huatian is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding East Money Information 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 East Money 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 East Money Information 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 East Money i.e., East Money and Huatian Hotel go up and down completely randomly.
Pair Corralation between East Money and Huatian Hotel
Assuming the 90 days trading horizon East Money Information is expected to generate 1.17 times more return on investment than Huatian Hotel. However, East Money is 1.17 times more volatile than Huatian Hotel Group. It trades about -0.14 of its potential returns per unit of risk. Huatian Hotel Group is currently generating about -0.16 per unit of risk. If you would invest 2,655 in East Money Information on October 28, 2024 and sell it today you would lose (246.00) from holding East Money Information or give up 9.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
East Money Information vs. Huatian Hotel Group
Performance |
| Timeline |
| East Money Information |
| Huatian Hotel Group |
East Money and Huatian Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East Money and Huatian Hotel
The main advantage of trading using opposite East Money and Huatian Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East Money 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.| East Money vs. Bingo Software Co | East Money vs. Fujian Boss Software | East Money vs. Jiangsu Hoperun Software | East Money vs. Qingdao Haier Biomedical |
| Huatian Hotel vs. Dareway Software Co | Huatian Hotel vs. Lutian Machinery Co | Huatian Hotel vs. Linzhou Heavy Machinery | Huatian Hotel vs. Linewell 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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