Correlation Between BTG Hotels and Tonghua Grape
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By analyzing existing cross correlation between BTG Hotels Group and Tonghua Grape Wine, you can compare the effects of market volatilities on BTG Hotels and Tonghua Grape 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 BTG Hotels with a short position of Tonghua Grape. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTG Hotels and Tonghua Grape.
Diversification Opportunities for BTG Hotels and Tonghua Grape
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BTG and Tonghua is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding BTG Hotels Group and Tonghua Grape Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tonghua Grape Wine and BTG Hotels 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 BTG Hotels Group are associated (or correlated) with Tonghua Grape. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tonghua Grape Wine has no effect on the direction of BTG Hotels i.e., BTG Hotels and Tonghua Grape go up and down completely randomly.
Pair Corralation between BTG Hotels and Tonghua Grape
Assuming the 90 days trading horizon BTG Hotels is expected to generate 1.37 times less return on investment than Tonghua Grape. But when comparing it to its historical volatility, BTG Hotels Group is 1.03 times less risky than Tonghua Grape. It trades about 0.17 of its potential returns per unit of risk. Tonghua Grape Wine is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 283.00 in Tonghua Grape Wine on September 24, 2024 and sell it today you would earn a total of 31.00 from holding Tonghua Grape Wine or generate 10.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
BTG Hotels Group vs. Tonghua Grape Wine
Performance |
Timeline |
BTG Hotels Group |
Tonghua Grape Wine |
BTG Hotels and Tonghua Grape Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BTG Hotels and Tonghua Grape
The main advantage of trading using opposite BTG Hotels and Tonghua Grape positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTG Hotels position performs unexpectedly, Tonghua Grape 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 Tonghua Grape will offset losses from the drop in Tonghua Grape's long position.BTG Hotels vs. Bank of China | BTG Hotels vs. Kweichow Moutai Co | BTG Hotels vs. PetroChina Co Ltd | BTG Hotels vs. Bank of Communications |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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