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
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guangzhou and Northern is 0.91. 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 is expected to generate 1.37 times less return on investment than Northern United. But when comparing it to its historical volatility, Guangzhou Dongfang Hotel is 1.08 times less risky than Northern United. It trades about 0.15 of its potential returns per unit of risk. Northern United Publishing is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 547.00 in Northern United Publishing on September 20, 2024 and sell it today you would earn a total of 206.00 from holding Northern United Publishing or generate 37.66% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very 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. Ming Yang Smart | Guangzhou Dongfang vs. 159681 | Guangzhou Dongfang vs. 159005 | Guangzhou Dongfang vs. Loctek Ergonomic Technology |
Northern United vs. Ming Yang Smart | Northern United vs. 159681 | Northern United vs. 159005 | Northern United vs. Loctek Ergonomic Technology |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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