Correlation Between ZongTai Real and HOYA Resort

Can any of the company-specific risk be diversified away by investing in both ZongTai Real and HOYA Resort 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 ZongTai Real and HOYA Resort into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ZongTai Real Estate and HOYA Resort Hotel, you can compare the effects of market volatilities on ZongTai Real and HOYA Resort 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 ZongTai Real with a short position of HOYA Resort. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZongTai Real and HOYA Resort.

Diversification Opportunities for ZongTai Real and HOYA Resort

0.0

Correlation Coefficient

ZongTai Real  HOYA Resort

Pay attention - limited upside

The 3 months correlation between ZongTai and HOYA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ZongTai Real Estate and HOYA Resort Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOYA Resort Hotel and ZongTai Real 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 ZongTai Real Estate are associated (or correlated) with HOYA Resort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HOYA Resort Hotel has no effect on the direction of ZongTai Real i.e., ZongTai Real and HOYA Resort go up and down completely randomly.

Pair Corralation between ZongTai Real and HOYA Resort

If you would invest  1,920  in HOYA Resort Hotel on October 8, 2024 and sell it today you would earn a total of  195.00  from holding HOYA Resort Hotel or generate 10.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

ZongTai Real Estate  vs.  HOYA Resort Hotel

ZongTai Real Estate

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days ZongTai Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, ZongTai Real is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

HOYA Resort Hotel

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in HOYA Resort Hotel are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, HOYA Resort may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with ZongTai Real and HOYA Resort

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

The idea behind ZongTai Real Estate and HOYA Resort Hotel 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.