Correlation Between Guangzhou Restaurants and 37 Interactive
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By analyzing existing cross correlation between Guangzhou Restaurants Group and 37 Interactive Entertainment, you can compare the effects of market volatilities on Guangzhou Restaurants and 37 Interactive 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 37 Interactive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Restaurants and 37 Interactive.
Diversification Opportunities for Guangzhou Restaurants and 37 Interactive
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangzhou and 002555 is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Restaurants Group and 37 Interactive Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 37 Interactive Enter 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 37 Interactive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 37 Interactive Enter has no effect on the direction of Guangzhou Restaurants i.e., Guangzhou Restaurants and 37 Interactive go up and down completely randomly.
Pair Corralation between Guangzhou Restaurants and 37 Interactive
Assuming the 90 days trading horizon Guangzhou Restaurants Group is expected to generate 0.57 times more return on investment than 37 Interactive. However, Guangzhou Restaurants Group is 1.75 times less risky than 37 Interactive. It trades about 0.11 of its potential returns per unit of risk. 37 Interactive Entertainment is currently generating about 0.03 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. 37 Interactive Entertainment
Performance |
| Timeline |
| Guangzhou Restaurants |
| 37 Interactive Enter |
Guangzhou Restaurants and 37 Interactive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Restaurants and 37 Interactive
The main advantage of trading using opposite Guangzhou Restaurants and 37 Interactive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Restaurants position performs unexpectedly, 37 Interactive 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 37 Interactive will offset losses from the drop in 37 Interactive'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 |
| 37 Interactive vs. Kweichow Moutai Co | 37 Interactive vs. Contemporary Amperex Technology | 37 Interactive vs. G bits Network Technology | 37 Interactive vs. BYD Co Ltd |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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