Correlation Between Guangzhou Restaurants and Sportsoul
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By analyzing existing cross correlation between Guangzhou Restaurants Group and Sportsoul Co Ltd, you can compare the effects of market volatilities on Guangzhou Restaurants and Sportsoul 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 Guangzhou Restaurants with a short position of Sportsoul. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Restaurants and Sportsoul.
Diversification Opportunities for Guangzhou Restaurants and Sportsoul
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangzhou and Sportsoul is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Restaurants Group and Sportsoul Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sportsoul and Guangzhou Restaurants 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 Guangzhou Restaurants Group are associated (or correlated) with Sportsoul. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sportsoul has no effect on the direction of Guangzhou Restaurants i.e., Guangzhou Restaurants and Sportsoul go up and down completely randomly.
Pair Corralation between Guangzhou Restaurants and Sportsoul
Assuming the 90 days trading horizon Guangzhou Restaurants is expected to generate 4.46 times less return on investment than Sportsoul. But when comparing it to its historical volatility, Guangzhou Restaurants Group is 2.17 times less risky than Sportsoul. It trades about 0.11 of its potential returns per unit of risk. Sportsoul Co Ltd is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,213 in Sportsoul Co Ltd on August 30, 2024 and sell it today you would earn a total of 250.00 from holding Sportsoul Co Ltd or generate 20.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Restaurants Group vs. Sportsoul Co Ltd
Performance |
| Timeline |
| Guangzhou Restaurants |
| Sportsoul |
Guangzhou Restaurants and Sportsoul Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Restaurants and Sportsoul
The main advantage of trading using opposite Guangzhou Restaurants and Sportsoul positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Restaurants position performs unexpectedly, Sportsoul 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 Sportsoul will offset losses from the drop in Sportsoul's long position.| Guangzhou Restaurants vs. China Petroleum Chemical | Guangzhou Restaurants vs. PetroChina Co Ltd | Guangzhou Restaurants vs. China State Construction | Guangzhou Restaurants vs. China Railway Group |
| Sportsoul vs. Cambricon Technologies Corp | Sportsoul vs. Loongson Technology Corp | Sportsoul vs. Shenzhen Fortune Trend | Sportsoul vs. Chongqing Road Bridge |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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