Correlation Between Guangzhou Restaurants and Focus Media
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By analyzing existing cross correlation between Guangzhou Restaurants Group and Focus Media Information, you can compare the effects of market volatilities on Guangzhou Restaurants and Focus Media 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 Focus Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Restaurants and Focus Media.
Diversification Opportunities for Guangzhou Restaurants and Focus Media
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangzhou and Focus is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Restaurants Group and Focus Media Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focus Media Information 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 Focus Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focus Media Information has no effect on the direction of Guangzhou Restaurants i.e., Guangzhou Restaurants and Focus Media go up and down completely randomly.
Pair Corralation between Guangzhou Restaurants and Focus Media
Assuming the 90 days trading horizon Guangzhou Restaurants Group is expected to generate 1.21 times more return on investment than Focus Media. However, Guangzhou Restaurants is 1.21 times more volatile than Focus Media Information. It trades about 0.11 of its potential returns per unit of risk. Focus Media Information is currently generating about -0.21 per unit of risk. If you would invest 1,553 in Guangzhou Restaurants Group on August 30, 2024 and sell it today you would earn a total of 67.00 from holding Guangzhou Restaurants Group or generate 4.31% 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. Focus Media Information
Performance |
| Timeline |
| Guangzhou Restaurants |
| Focus Media Information |
Guangzhou Restaurants and Focus Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Restaurants and Focus Media
The main advantage of trading using opposite Guangzhou Restaurants and Focus Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Restaurants position performs unexpectedly, Focus Media 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 Focus Media will offset losses from the drop in Focus Media'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 |
| Focus Media vs. CareRay Digital Medical | Focus Media vs. Nanjing Medlander Medical | Focus Media vs. Cofoe Medical Technology | Focus Media vs. Allmed Medical Products |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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