Correlation Between GreenTree Hospitality and Atour Lifestyle

Can any of the company-specific risk be diversified away by investing in both GreenTree Hospitality and Atour Lifestyle 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 GreenTree Hospitality and Atour Lifestyle into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GreenTree Hospitality Group and Atour Lifestyle Holdings, you can compare the effects of market volatilities on GreenTree Hospitality and Atour Lifestyle 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 GreenTree Hospitality with a short position of Atour Lifestyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenTree Hospitality and Atour Lifestyle.

Diversification Opportunities for GreenTree Hospitality and Atour Lifestyle

0.63

Correlation Coefficient

GreenTree Hospitality  Atour Lifestyle

Poor diversification

The 3 months correlation between GreenTree and Atour is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding GreenTree Hospitality Group and Atour Lifestyle Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atour Lifestyle Holdings and GreenTree Hospitality 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 GreenTree Hospitality Group are associated (or correlated) with Atour Lifestyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atour Lifestyle Holdings has no effect on the direction of GreenTree Hospitality i.e., GreenTree Hospitality and Atour Lifestyle go up and down completely randomly.

Pair Corralation between GreenTree Hospitality and Atour Lifestyle

Considering the 90-day investment horizon GreenTree Hospitality is expected to generate 3.23 times less return on investment than Atour Lifestyle. But when comparing it to its historical volatility, GreenTree Hospitality Group is 1.05 times less risky than Atour Lifestyle. It trades about 0.02 of its potential returns per unit of risk. Atour Lifestyle Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2,656  in Atour Lifestyle Holdings on December 28, 2024 and sell it today you would earn a total of  255.00  from holding Atour Lifestyle Holdings or generate 9.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

GreenTree Hospitality Group  vs.  Atour Lifestyle Holdings

GreenTree Hospitality

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GreenTree Hospitality Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical indicators, GreenTree Hospitality is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Atour Lifestyle Holdings

Risk-Adjusted Performance

Modest

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

Pair Trading with GreenTree Hospitality and Atour Lifestyle

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

The idea behind GreenTree Hospitality Group and Atour Lifestyle Holdings 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .