Correlation Between BTG Hotels and China Railway
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By analyzing existing cross correlation between BTG Hotels Group and China Railway Construction, you can compare the effects of market volatilities on BTG Hotels and China Railway 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 BTG Hotels with a short position of China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTG Hotels and China Railway.
Diversification Opportunities for BTG Hotels and China Railway
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BTG and China is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding BTG Hotels Group and China Railway Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Railway Constr and BTG Hotels 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 BTG Hotels Group are associated (or correlated) with China Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Railway Constr has no effect on the direction of BTG Hotels i.e., BTG Hotels and China Railway go up and down completely randomly.
Pair Corralation between BTG Hotels and China Railway
Assuming the 90 days trading horizon BTG Hotels Group is expected to under-perform the China Railway. In addition to that, BTG Hotels is 1.45 times more volatile than China Railway Construction. It trades about -0.25 of its total potential returns per unit of risk. China Railway Construction is currently generating about -0.27 per unit of volatility. If you would invest 917.00 in China Railway Construction on November 1, 2024 and sell it today you would lose (63.00) from holding China Railway Construction or give up 6.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BTG Hotels Group vs. China Railway Construction
Performance |
| Timeline |
| BTG Hotels Group |
| China Railway Constr |
BTG Hotels and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTG Hotels and China Railway
The main advantage of trading using opposite BTG Hotels and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTG Hotels position performs unexpectedly, China Railway 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 China Railway will offset losses from the drop in China Railway's long position.| BTG Hotels vs. Tonghua Grape Wine | BTG Hotels vs. Shanghai CEO Environmental | BTG Hotels vs. Ningbo Ligong Online | BTG Hotels vs. Jinhe Biotechnology Co |
| China Railway vs. BTG Hotels Group | China Railway vs. Fujian Newland Computer | China Railway vs. Jiangxi Hengda Hi Tech | China Railway vs. Lier Chemical 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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