Correlation Between Event Hospitality and China Oilfield
Can any of the company-specific risk be diversified away by investing in both Event Hospitality and China Oilfield at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Event Hospitality and China Oilfield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Event Hospitality and and China Oilfield Services, you can compare the effects of market volatilities on Event Hospitality and China Oilfield 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 Event Hospitality with a short position of China Oilfield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Event Hospitality and China Oilfield.
Diversification Opportunities for Event Hospitality and China Oilfield
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Event and China is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Event Hospitality and and China Oilfield Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Oilfield Services and Event Hospitality 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 Event Hospitality and are associated (or correlated) with China Oilfield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Oilfield Services has no effect on the direction of Event Hospitality i.e., Event Hospitality and China Oilfield go up and down completely randomly.
Pair Corralation between Event Hospitality and China Oilfield
Assuming the 90 days trading horizon Event Hospitality is expected to generate 2.39 times less return on investment than China Oilfield. But when comparing it to its historical volatility, Event Hospitality and is 1.8 times less risky than China Oilfield. It trades about 0.02 of its potential returns per unit of risk. China Oilfield Services is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 64.00 in China Oilfield Services on November 27, 2024 and sell it today you would earn a total of 12.00 from holding China Oilfield Services or generate 18.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Event Hospitality and vs. China Oilfield Services
Performance |
| Timeline |
| Event Hospitality |
| China Oilfield Services |
Event Hospitality and China Oilfield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Event Hospitality and China Oilfield
The main advantage of trading using opposite Event Hospitality and China Oilfield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Event Hospitality position performs unexpectedly, China Oilfield 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 China Oilfield will offset losses from the drop in China Oilfield's long position.| Event Hospitality vs. SERI INDUSTRIAL EO | Event Hospitality vs. Stag Industrial | Event Hospitality vs. GREENX METALS LTD | Event Hospitality vs. Broadcom |
| China Oilfield vs. T Mobile | China Oilfield vs. INTERSHOP Communications Aktiengesellschaft | China Oilfield vs. MEDICAL FACILITIES NEW | China Oilfield vs. Peijia Medical Limited |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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