Correlation Between GreenTree Hospitality and LuxUrban Hotels
Can any of the company-specific risk be diversified away by investing in both GreenTree Hospitality and LuxUrban Hotels 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 GreenTree Hospitality and LuxUrban Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenTree Hospitality Group and LuxUrban Hotels, you can compare the effects of market volatilities on GreenTree Hospitality and LuxUrban Hotels 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 GreenTree Hospitality with a short position of LuxUrban Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenTree Hospitality and LuxUrban Hotels.
Diversification Opportunities for GreenTree Hospitality and LuxUrban Hotels
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between GreenTree and LuxUrban is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding GreenTree Hospitality Group and LuxUrban Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LuxUrban Hotels and GreenTree 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 GreenTree Hospitality Group are associated (or correlated) with LuxUrban Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LuxUrban Hotels has no effect on the direction of GreenTree Hospitality i.e., GreenTree Hospitality and LuxUrban Hotels go up and down completely randomly.
Pair Corralation between GreenTree Hospitality and LuxUrban Hotels
Considering the 90-day investment horizon GreenTree Hospitality Group is expected to generate 0.22 times more return on investment than LuxUrban Hotels. However, GreenTree Hospitality Group is 4.48 times less risky than LuxUrban Hotels. It trades about -0.15 of its potential returns per unit of risk. LuxUrban Hotels is currently generating about -0.38 per unit of risk. If you would invest 295.00 in GreenTree Hospitality Group on August 24, 2024 and sell it today you would lose (28.00) from holding GreenTree Hospitality Group or give up 9.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GreenTree Hospitality Group vs. LuxUrban Hotels
Performance |
| Timeline |
| GreenTree Hospitality |
| LuxUrban Hotels |
GreenTree Hospitality and LuxUrban Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenTree Hospitality and LuxUrban Hotels
The main advantage of trading using opposite GreenTree Hospitality and LuxUrban Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenTree Hospitality position performs unexpectedly, LuxUrban Hotels 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 LuxUrban Hotels will offset losses from the drop in LuxUrban Hotels' long position.| GreenTree Hospitality vs. LuxUrban Hotels | GreenTree Hospitality vs. InterContinental Hotels Group | GreenTree Hospitality vs. Atour Lifestyle Holdings | GreenTree Hospitality vs. Huazhu Group |
| LuxUrban Hotels vs. GreenTree Hospitality Group | LuxUrban Hotels vs. InterContinental Hotels Group | LuxUrban Hotels vs. Atour Lifestyle Holdings | LuxUrban Hotels vs. Huazhu 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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