Correlation Between Caihong Display and Jinling Hotel
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By analyzing existing cross correlation between Caihong Display Devices and Jinling Hotel Corp, you can compare the effects of market volatilities on Caihong Display and Jinling 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 Caihong Display with a short position of Jinling Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caihong Display and Jinling Hotel.
Diversification Opportunities for Caihong Display and Jinling Hotel
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Caihong and Jinling is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Caihong Display Devices and Jinling Hotel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinling Hotel Corp and Caihong Display 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 Caihong Display Devices are associated (or correlated) with Jinling Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinling Hotel Corp has no effect on the direction of Caihong Display i.e., Caihong Display and Jinling Hotel go up and down completely randomly.
Pair Corralation between Caihong Display and Jinling Hotel
Assuming the 90 days trading horizon Caihong Display Devices is expected to generate 1.16 times more return on investment than Jinling Hotel. However, Caihong Display is 1.16 times more volatile than Jinling Hotel Corp. It trades about 0.06 of its potential returns per unit of risk. Jinling Hotel Corp is currently generating about -0.02 per unit of risk. If you would invest 460.00 in Caihong Display Devices on August 31, 2024 and sell it today you would earn a total of 237.00 from holding Caihong Display Devices or generate 51.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
Caihong Display Devices vs. Jinling Hotel Corp
Performance |
| Timeline |
| Caihong Display Devices |
| Jinling Hotel Corp |
Caihong Display and Jinling Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caihong Display and Jinling Hotel
The main advantage of trading using opposite Caihong Display and Jinling Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caihong Display position performs unexpectedly, Jinling 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 Jinling Hotel will offset losses from the drop in Jinling Hotel's long position.| Caihong Display vs. Guangzhou Boji Medical | Caihong Display vs. Touchstone International Medical | Caihong Display vs. CICC Fund Management | Caihong Display vs. CareRay Digital Medical |
| Jinling Hotel vs. China State Construction | Jinling Hotel vs. China Merchants Shekou | Jinling Hotel vs. Huafa Industrial Co | Jinling Hotel vs. China International Capital |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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