Correlation Between Huatian Hotel and Cicc Fund

Can any of the company-specific risk be diversified away by investing in both Huatian Hotel and Cicc Fund 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 Huatian Hotel and Cicc Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Huatian Hotel Group and Cicc Fund Management, you can compare the effects of market volatilities on Huatian Hotel and Cicc Fund 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 Huatian Hotel with a short position of Cicc Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huatian Hotel and Cicc Fund.

Diversification Opportunities for Huatian Hotel and Cicc Fund

-0.58

Correlation Coefficient

Huatian Hotel  Cicc Fund

Excellent diversification

The 3 months correlation between Huatian and Cicc is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Huatian Hotel Group and Cicc Fund Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cicc Fund Management and Huatian 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 Huatian Hotel Group are associated (or correlated) with Cicc Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cicc Fund Management has no effect on the direction of Huatian Hotel i.e., Huatian Hotel and Cicc Fund go up and down completely randomly.

Pair Corralation between Huatian Hotel and Cicc Fund

Assuming the 90 days trading horizon Huatian Hotel is expected to generate 5.27 times less return on investment than Cicc Fund. In addition to that, Huatian Hotel is 2.02 times more volatile than Cicc Fund Management. It trades about 0.02 of its total potential returns per unit of risk. Cicc Fund Management is currently generating about 0.19 per unit of volatility. If you would invest  230.00  in Cicc Fund Management on December 25, 2024 and sell it today you would earn a total of  26.00  from holding Cicc Fund Management or generate 11.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Huatian Hotel Group  vs.  Cicc Fund Management

Huatian Hotel Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Huatian Hotel Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Huatian Hotel is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Cicc Fund Management

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cicc Fund Management are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Cicc Fund may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Huatian Hotel and Cicc Fund

The main advantage of trading using opposite Huatian Hotel and Cicc Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huatian Hotel position performs unexpectedly, Cicc Fund 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 Cicc Fund will offset losses from the drop in Cicc Fund's long position.

The idea behind Huatian Hotel Group and Cicc Fund Management 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.

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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..