Correlation Between Guangdong Shenglu and Jinling Hotel
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By analyzing existing cross correlation between Guangdong Shenglu Telecommunication and Jinling Hotel Corp, you can compare the effects of market volatilities on Guangdong Shenglu and Jinling 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 Guangdong Shenglu with a short position of Jinling Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Shenglu and Jinling Hotel.
Diversification Opportunities for Guangdong Shenglu and Jinling Hotel
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guangdong and Jinling is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Shenglu Telecommunic and Jinling Hotel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinling Hotel Corp and Guangdong Shenglu 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 Guangdong Shenglu Telecommunication are associated (or correlated) with Jinling Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinling Hotel Corp has no effect on the direction of Guangdong Shenglu i.e., Guangdong Shenglu and Jinling Hotel go up and down completely randomly.
Pair Corralation between Guangdong Shenglu and Jinling Hotel
Assuming the 90 days trading horizon Guangdong Shenglu Telecommunication is expected to generate 1.22 times more return on investment than Jinling Hotel. However, Guangdong Shenglu is 1.22 times more volatile than Jinling Hotel Corp. It trades about -0.02 of its potential returns per unit of risk. Jinling Hotel Corp is currently generating about -0.03 per unit of risk. If you would invest 1,079 in Guangdong Shenglu Telecommunication on September 26, 2024 and sell it today you would lose (387.00) from holding Guangdong Shenglu Telecommunication or give up 35.87% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Guangdong Shenglu Telecommunic vs. Jinling Hotel Corp
Performance |
Timeline |
Guangdong Shenglu |
Jinling Hotel Corp |
Guangdong Shenglu and Jinling Hotel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Guangdong Shenglu and Jinling Hotel
The main advantage of trading using opposite Guangdong Shenglu and Jinling Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Shenglu position performs unexpectedly, Jinling 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 Jinling Hotel will offset losses from the drop in Jinling Hotel's long position.Guangdong Shenglu vs. Dongfeng Automobile Co | Guangdong Shenglu vs. China Mobile Limited | Guangdong Shenglu vs. Railway Signal Communication | Guangdong Shenglu vs. Dareway Software Co |
Jinling Hotel vs. Liaoning Dingjide Petrochemical | Jinling Hotel vs. Dymatic Chemicals | Jinling Hotel vs. TianJin 712 Communication | Jinling Hotel vs. Guangdong Shenglu Telecommunication |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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