Correlation Between Zhongtong Guomai and Guangzhou Dongfang
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By analyzing existing cross correlation between Zhongtong Guomai Communication and Guangzhou Dongfang Hotel, you can compare the effects of market volatilities on Zhongtong Guomai and Guangzhou Dongfang 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 Zhongtong Guomai with a short position of Guangzhou Dongfang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongtong Guomai and Guangzhou Dongfang.
Diversification Opportunities for Zhongtong Guomai and Guangzhou Dongfang
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhongtong and Guangzhou is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Zhongtong Guomai Communication and Guangzhou Dongfang Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Dongfang Hotel and Zhongtong Guomai 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 Zhongtong Guomai Communication are associated (or correlated) with Guangzhou Dongfang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Dongfang Hotel has no effect on the direction of Zhongtong Guomai i.e., Zhongtong Guomai and Guangzhou Dongfang go up and down completely randomly.
Pair Corralation between Zhongtong Guomai and Guangzhou Dongfang
Assuming the 90 days trading horizon Zhongtong Guomai Communication is expected to generate 1.45 times more return on investment than Guangzhou Dongfang. However, Zhongtong Guomai is 1.45 times more volatile than Guangzhou Dongfang Hotel. It trades about 0.2 of its potential returns per unit of risk. Guangzhou Dongfang Hotel is currently generating about 0.06 per unit of risk. If you would invest 465.00 in Zhongtong Guomai Communication on September 1, 2024 and sell it today you would earn a total of 656.00 from holding Zhongtong Guomai Communication or generate 141.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhongtong Guomai Communication vs. Guangzhou Dongfang Hotel
Performance |
| Timeline |
| Zhongtong Guomai Com |
| Guangzhou Dongfang Hotel |
Zhongtong Guomai and Guangzhou Dongfang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongtong Guomai and Guangzhou Dongfang
The main advantage of trading using opposite Zhongtong Guomai and Guangzhou Dongfang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongtong Guomai position performs unexpectedly, Guangzhou Dongfang 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 Guangzhou Dongfang will offset losses from the drop in Guangzhou Dongfang's long position.| Zhongtong Guomai vs. Chengdu B ray Media | Zhongtong Guomai vs. Mango Excellent Media | Zhongtong Guomai vs. Focus Media Information | Zhongtong Guomai vs. JiShi Media Co |
| Guangzhou Dongfang vs. Songz Automobile Air | Guangzhou Dongfang vs. Zhejiang Publishing Media | Guangzhou Dongfang vs. Xinhua Winshare Publishing | Guangzhou Dongfang vs. Haima Automobile Group |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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