Correlation Between Shandong Ruifeng and BTG Hotels
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By analyzing existing cross correlation between Shandong Ruifeng Chemical and BTG Hotels Group, you can compare the effects of market volatilities on Shandong Ruifeng and BTG Hotels 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 Shandong Ruifeng with a short position of BTG Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Ruifeng and BTG Hotels.
Diversification Opportunities for Shandong Ruifeng and BTG Hotels
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shandong and BTG is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Ruifeng Chemical and BTG Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTG Hotels Group and Shandong Ruifeng 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 Shandong Ruifeng Chemical are associated (or correlated) with BTG Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTG Hotels Group has no effect on the direction of Shandong Ruifeng i.e., Shandong Ruifeng and BTG Hotels go up and down completely randomly.
Pair Corralation between Shandong Ruifeng and BTG Hotels
Assuming the 90 days trading horizon Shandong Ruifeng Chemical is expected to generate 1.98 times more return on investment than BTG Hotels. However, Shandong Ruifeng is 1.98 times more volatile than BTG Hotels Group. It trades about 0.05 of its potential returns per unit of risk. BTG Hotels Group is currently generating about -0.02 per unit of risk. If you would invest 954.00 in Shandong Ruifeng Chemical on August 25, 2024 and sell it today you would earn a total of 304.00 from holding Shandong Ruifeng Chemical or generate 31.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Ruifeng Chemical vs. BTG Hotels Group
Performance |
| Timeline |
| Shandong Ruifeng Chemical |
| BTG Hotels Group |
Shandong Ruifeng and BTG Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Ruifeng and BTG Hotels
The main advantage of trading using opposite Shandong Ruifeng and BTG Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Ruifeng position performs unexpectedly, BTG Hotels 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 BTG Hotels will offset losses from the drop in BTG Hotels' long position.| Shandong Ruifeng vs. Dalian Thermal Power | Shandong Ruifeng vs. Shandong Mining Machinery | Shandong Ruifeng vs. Changjiang Publishing Media | Shandong Ruifeng vs. Guangzhou Restaurants Group |
| BTG Hotels vs. Biwin Storage Technology | BTG Hotels vs. PetroChina Co Ltd | BTG Hotels vs. Industrial and Commercial | BTG Hotels vs. China Construction Bank |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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