Correlation Between Huaneng Lancang and Huatian Hotel
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By analyzing existing cross correlation between Huaneng Lancang River and Huatian Hotel Group, you can compare the effects of market volatilities on Huaneng Lancang 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 Huaneng Lancang with a short position of Huatian Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huaneng Lancang and Huatian Hotel.
Diversification Opportunities for Huaneng Lancang and Huatian Hotel
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Huaneng and Huatian is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Huaneng Lancang River 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 Huaneng Lancang 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 Huaneng Lancang River 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 Huaneng Lancang i.e., Huaneng Lancang and Huatian Hotel go up and down completely randomly.
Pair Corralation between Huaneng Lancang and Huatian Hotel
Assuming the 90 days trading horizon Huaneng Lancang River is expected to generate 0.52 times more return on investment than Huatian Hotel. However, Huaneng Lancang River is 1.93 times less risky than Huatian Hotel. It trades about 0.01 of its potential returns per unit of risk. Huatian Hotel Group is currently generating about 0.0 per unit of risk. If you would invest 932.00 in Huaneng Lancang River on August 25, 2024 and sell it today you would earn a total of 10.00 from holding Huaneng Lancang River or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huaneng Lancang River vs. Huatian Hotel Group
Performance |
| Timeline |
| Huaneng Lancang River |
| Huatian Hotel Group |
Huaneng Lancang and Huatian Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huaneng Lancang and Huatian Hotel
The main advantage of trading using opposite Huaneng Lancang and Huatian Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huaneng Lancang 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.| Huaneng Lancang vs. Bus Online Co | Huaneng Lancang vs. Weihai Honglin Electronic | Huaneng Lancang vs. Epoxy Base Electronic | Huaneng Lancang vs. Success Electronics |
| Huatian Hotel vs. Biwin Storage Technology | Huatian Hotel vs. PetroChina Co Ltd | Huatian Hotel vs. Industrial and Commercial | Huatian Hotel 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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