Correlation Between Kunshan Guoli and Huatian Hotel
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By analyzing existing cross correlation between Kunshan Guoli Electronic and Huatian Hotel Group, you can compare the effects of market volatilities on Kunshan Guoli and Huatian 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 Kunshan Guoli with a short position of Huatian Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kunshan Guoli and Huatian Hotel.
Diversification Opportunities for Kunshan Guoli and Huatian Hotel
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kunshan and Huatian is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Kunshan Guoli Electronic and Huatian Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huatian Hotel Group and Kunshan Guoli 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 Kunshan Guoli Electronic are associated (or correlated) with Huatian Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huatian Hotel Group has no effect on the direction of Kunshan Guoli i.e., Kunshan Guoli and Huatian Hotel go up and down completely randomly.
Pair Corralation between Kunshan Guoli and Huatian Hotel
Assuming the 90 days trading horizon Kunshan Guoli Electronic is expected to generate 1.22 times more return on investment than Huatian Hotel. However, Kunshan Guoli is 1.22 times more volatile than Huatian Hotel Group. It trades about -0.01 of its potential returns per unit of risk. Huatian Hotel Group is currently generating about -0.02 per unit of risk. If you would invest 6,928 in Kunshan Guoli Electronic on August 30, 2024 and sell it today you would lose (2,717) from holding Kunshan Guoli Electronic or give up 39.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kunshan Guoli Electronic vs. Huatian Hotel Group
Performance |
| Timeline |
| Kunshan Guoli Electronic |
| Huatian Hotel Group |
Kunshan Guoli and Huatian Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kunshan Guoli and Huatian Hotel
The main advantage of trading using opposite Kunshan Guoli and Huatian Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kunshan Guoli position performs unexpectedly, Huatian 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 Huatian Hotel will offset losses from the drop in Huatian Hotel's long position.| Kunshan Guoli vs. Cultural Investment Holdings | Kunshan Guoli vs. Gome Telecom Equipment | Kunshan Guoli vs. Bus Online Co | Kunshan Guoli vs. Holitech Technology Co |
| Huatian Hotel vs. China Petroleum Chemical | Huatian Hotel vs. PetroChina Co Ltd | Huatian Hotel vs. China State Construction | Huatian Hotel vs. China Railway 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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