Correlation Between Orinko Advanced and Guangzhou Dongfang
Specify exactly 2 symbols:
By analyzing existing cross correlation between Orinko Advanced Plastics and Guangzhou Dongfang Hotel, you can compare the effects of market volatilities on Orinko Advanced 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 Orinko Advanced with a short position of Guangzhou Dongfang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orinko Advanced and Guangzhou Dongfang.
Diversification Opportunities for Orinko Advanced and Guangzhou Dongfang
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Orinko and Guangzhou is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Orinko Advanced Plastics 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 Orinko Advanced 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 Orinko Advanced Plastics 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 Orinko Advanced i.e., Orinko Advanced and Guangzhou Dongfang go up and down completely randomly.
Pair Corralation between Orinko Advanced and Guangzhou Dongfang
Assuming the 90 days trading horizon Orinko Advanced Plastics is expected to generate 1.38 times more return on investment than Guangzhou Dongfang. However, Orinko Advanced is 1.38 times more volatile than Guangzhou Dongfang Hotel. It trades about 0.23 of its potential returns per unit of risk. Guangzhou Dongfang Hotel is currently generating about 0.16 per unit of risk. If you would invest 981.00 in Orinko Advanced Plastics on November 7, 2024 and sell it today you would earn a total of 93.00 from holding Orinko Advanced Plastics or generate 9.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orinko Advanced Plastics vs. Guangzhou Dongfang Hotel
Performance |
| Timeline |
| Orinko Advanced Plastics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Guangzhou Dongfang Hotel |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Orinko Advanced and Guangzhou Dongfang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orinko Advanced and Guangzhou Dongfang
The main advantage of trading using opposite Orinko Advanced and Guangzhou Dongfang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orinko Advanced 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.The idea behind Orinko Advanced Plastics and Guangzhou Dongfang Hotel pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |