Correlation Between Sinocelltech Group and Huatian Hotel
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By analyzing existing cross correlation between Sinocelltech Group and Huatian Hotel Group, you can compare the effects of market volatilities on Sinocelltech Group 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 Sinocelltech Group with a short position of Huatian Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinocelltech Group and Huatian Hotel.
Diversification Opportunities for Sinocelltech Group and Huatian Hotel
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sinocelltech and Huatian is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Sinocelltech Group 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 Sinocelltech Group 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 Sinocelltech Group 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 Sinocelltech Group i.e., Sinocelltech Group and Huatian Hotel go up and down completely randomly.
Pair Corralation between Sinocelltech Group and Huatian Hotel
Assuming the 90 days trading horizon Sinocelltech Group is expected to generate 1.37 times less return on investment than Huatian Hotel. In addition to that, Sinocelltech Group is 1.05 times more volatile than Huatian Hotel Group. It trades about 0.07 of its total potential returns per unit of risk. Huatian Hotel Group is currently generating about 0.1 per unit of volatility. If you would invest 295.00 in Huatian Hotel Group on November 7, 2024 and sell it today you would earn a total of 8.00 from holding Huatian Hotel Group or generate 2.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinocelltech Group vs. Huatian Hotel Group
Performance |
| Timeline |
| Sinocelltech Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Huatian Hotel Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sinocelltech Group and Huatian Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinocelltech Group and Huatian Hotel
The main advantage of trading using opposite Sinocelltech Group and Huatian Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinocelltech Group 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.The idea behind Sinocelltech Group and Huatian Hotel Group 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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