Correlation Between Beijing Wandong and Huatian Hotel
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By analyzing existing cross correlation between Beijing Wandong Medical and Huatian Hotel Group, you can compare the effects of market volatilities on Beijing Wandong 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 Beijing Wandong with a short position of Huatian Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Wandong and Huatian Hotel.
Diversification Opportunities for Beijing Wandong and Huatian Hotel
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beijing and Huatian is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Wandong Medical 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 Beijing Wandong 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 Wandong Medical 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 Beijing Wandong i.e., Beijing Wandong and Huatian Hotel go up and down completely randomly.
Pair Corralation between Beijing Wandong and Huatian Hotel
Assuming the 90 days trading horizon Beijing Wandong Medical is expected to under-perform the Huatian Hotel. But the stock apears to be less risky and, when comparing its historical volatility, Beijing Wandong Medical is 1.85 times less risky than Huatian Hotel. The stock trades about -0.3 of its potential returns per unit of risk. The Huatian Hotel Group is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 340.00 in Huatian Hotel Group on September 28, 2024 and sell it today you would lose (9.00) from holding Huatian Hotel Group or give up 2.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Wandong Medical vs. Huatian Hotel Group
Performance |
| Timeline |
| Beijing Wandong Medical |
| Huatian Hotel Group |
Beijing Wandong and Huatian Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Wandong and Huatian Hotel
The main advantage of trading using opposite Beijing Wandong and Huatian Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Wandong 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.| Beijing Wandong vs. New China Life | Beijing Wandong vs. Ming Yang Smart | Beijing Wandong vs. 159681 | Beijing Wandong vs. 159005 |
| Huatian Hotel vs. Jiangxi Selon Industrial | Huatian Hotel vs. Qingdao Choho Industrial | Huatian Hotel vs. Dirui Industrial Co | Huatian Hotel vs. Beijing Wandong Medical |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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