Correlation Between ReTo Eco and Oasis Hotel
Can any of the company-specific risk be diversified away by investing in both ReTo Eco and Oasis Hotel 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 ReTo Eco and Oasis Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ReTo Eco Solutions and Oasis Hotel Resort, you can compare the effects of market volatilities on ReTo Eco and Oasis 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 ReTo Eco with a short position of Oasis Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of ReTo Eco and Oasis Hotel.
Diversification Opportunities for ReTo Eco and Oasis Hotel
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ReTo and Oasis is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ReTo Eco Solutions and Oasis Hotel Resort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oasis Hotel Resort and ReTo Eco 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 ReTo Eco Solutions are associated (or correlated) with Oasis Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oasis Hotel Resort has no effect on the direction of ReTo Eco i.e., ReTo Eco and Oasis Hotel go up and down completely randomly.
Pair Corralation between ReTo Eco and Oasis Hotel
Given the investment horizon of 90 days ReTo Eco Solutions is expected to generate 11.96 times more return on investment than Oasis Hotel. However, ReTo Eco is 11.96 times more volatile than Oasis Hotel Resort. It trades about 0.04 of its potential returns per unit of risk. Oasis Hotel Resort is currently generating about -0.05 per unit of risk. If you would invest 2,701 in ReTo Eco Solutions on October 29, 2024 and sell it today you would lose (2,615) from holding ReTo Eco Solutions or give up 96.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ReTo Eco Solutions vs. Oasis Hotel Resort
Performance |
| Timeline |
| ReTo Eco Solutions |
| Oasis Hotel Resort |
ReTo Eco and Oasis Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ReTo Eco and Oasis Hotel
The main advantage of trading using opposite ReTo Eco and Oasis Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ReTo Eco position performs unexpectedly, Oasis 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 Oasis Hotel will offset losses from the drop in Oasis Hotel's long position.| ReTo Eco vs. Martin Marietta Materials | ReTo Eco vs. Vulcan Materials | ReTo Eco vs. Summit Materials | ReTo Eco vs. United States Lime |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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