Correlation Between NH HOTEL and QINGCI GAMES
Can any of the company-specific risk be diversified away by investing in both NH HOTEL and QINGCI GAMES 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 NH HOTEL and QINGCI GAMES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NH HOTEL GROUP and QINGCI GAMES INC, you can compare the effects of market volatilities on NH HOTEL and QINGCI GAMES 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 NH HOTEL with a short position of QINGCI GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH HOTEL and QINGCI GAMES.
Diversification Opportunities for NH HOTEL and QINGCI GAMES
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NH5 and QINGCI is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding NH HOTEL GROUP and QINGCI GAMES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QINGCI GAMES INC and NH HOTEL 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 NH HOTEL GROUP are associated (or correlated) with QINGCI GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QINGCI GAMES INC has no effect on the direction of NH HOTEL i.e., NH HOTEL and QINGCI GAMES go up and down completely randomly.
Pair Corralation between NH HOTEL and QINGCI GAMES
Assuming the 90 days trading horizon NH HOTEL GROUP is expected to generate 1.08 times more return on investment than QINGCI GAMES. However, NH HOTEL is 1.08 times more volatile than QINGCI GAMES INC. It trades about 0.05 of its potential returns per unit of risk. QINGCI GAMES INC is currently generating about -0.06 per unit of risk. If you would invest 399.00 in NH HOTEL GROUP on September 4, 2024 and sell it today you would earn a total of 33.00 from holding NH HOTEL GROUP or generate 8.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NH HOTEL GROUP vs. QINGCI GAMES INC
Performance |
| Timeline |
| NH HOTEL GROUP |
| QINGCI GAMES INC |
NH HOTEL and QINGCI GAMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH HOTEL and QINGCI GAMES
The main advantage of trading using opposite NH HOTEL and QINGCI GAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH HOTEL position performs unexpectedly, QINGCI GAMES 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 QINGCI GAMES will offset losses from the drop in QINGCI GAMES's long position.The idea behind NH HOTEL GROUP and QINGCI GAMES INC 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.| QINGCI GAMES vs. Nintendo Co | QINGCI GAMES vs. Nintendo Co | QINGCI GAMES vs. Sea Limited | QINGCI GAMES vs. Take Two Interactive Software |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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