Correlation Between Guangzhou Dongfang and Northern United
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By analyzing existing cross correlation between Guangzhou Dongfang Hotel and Northern United Publishing, you can compare the effects of market volatilities on Guangzhou Dongfang and Northern United 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 Guangzhou Dongfang with a short position of Northern United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Dongfang and Northern United.
Diversification Opportunities for Guangzhou Dongfang and Northern United
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangzhou and Northern is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Dongfang Hotel and Northern United Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern United Publ and Guangzhou Dongfang 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 Guangzhou Dongfang Hotel are associated (or correlated) with Northern United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern United Publ has no effect on the direction of Guangzhou Dongfang i.e., Guangzhou Dongfang and Northern United go up and down completely randomly.
Pair Corralation between Guangzhou Dongfang and Northern United
Assuming the 90 days trading horizon Guangzhou Dongfang Hotel is expected to generate 0.88 times more return on investment than Northern United. However, Guangzhou Dongfang Hotel is 1.13 times less risky than Northern United. It trades about -0.03 of its potential returns per unit of risk. Northern United Publishing is currently generating about -0.08 per unit of risk. If you would invest 1,059 in Guangzhou Dongfang Hotel on December 11, 2024 and sell it today you would lose (52.00) from holding Guangzhou Dongfang Hotel or give up 4.91% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Guangzhou Dongfang Hotel vs. Northern United Publishing
Performance |
Timeline |
Guangzhou Dongfang Hotel |
Northern United Publ |
Guangzhou Dongfang and Northern United Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Guangzhou Dongfang and Northern United
The main advantage of trading using opposite Guangzhou Dongfang and Northern United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Dongfang position performs unexpectedly, Northern United 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 Northern United will offset losses from the drop in Northern United's long position.Guangzhou Dongfang vs. PetroChina Co Ltd | Guangzhou Dongfang vs. China Mobile Limited | Guangzhou Dongfang vs. CNOOC Limited | Guangzhou Dongfang vs. Ping An Insurance |
Northern United vs. Henan Shuanghui Investment | Northern United vs. Heren Health Co | Northern United vs. Harvest Fund Management | Northern United vs. JCHX Mining Management |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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