Correlation Between GreenTree Hospitality and JX Luxventure
Can any of the company-specific risk be diversified away by investing in both GreenTree Hospitality and JX Luxventure 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 JX Luxventure 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 JX Luxventure Limited, you can compare the effects of market volatilities on GreenTree Hospitality and JX Luxventure 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 JX Luxventure. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenTree Hospitality and JX Luxventure.
Diversification Opportunities for GreenTree Hospitality and JX Luxventure
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between GreenTree and JXG is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding GreenTree Hospitality Group and JX Luxventure Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JX Luxventure Limited 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 JX Luxventure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JX Luxventure Limited has no effect on the direction of GreenTree Hospitality i.e., GreenTree Hospitality and JX Luxventure go up and down completely randomly.
Pair Corralation between GreenTree Hospitality and JX Luxventure
Considering the 90-day investment horizon GreenTree Hospitality Group is expected to under-perform the JX Luxventure. But the stock apears to be less risky and, when comparing its historical volatility, GreenTree Hospitality Group is 4.62 times less risky than JX Luxventure. The stock trades about -0.02 of its potential returns per unit of risk. The JX Luxventure Limited is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 890.00 in JX Luxventure Limited on October 23, 2024 and sell it today you would lose (613.00) from holding JX Luxventure Limited or give up 68.88% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
GreenTree Hospitality Group vs. JX Luxventure Limited
Performance |
Timeline |
GreenTree Hospitality |
JX Luxventure Limited |
GreenTree Hospitality and JX Luxventure Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GreenTree Hospitality and JX Luxventure
The main advantage of trading using opposite GreenTree Hospitality and JX Luxventure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenTree Hospitality position performs unexpectedly, JX Luxventure 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 JX Luxventure will offset losses from the drop in JX Luxventure's long position.GreenTree Hospitality vs. LuxUrban Hotels | GreenTree Hospitality vs. InterContinental Hotels Group | GreenTree Hospitality vs. Atour Lifestyle Holdings | GreenTree Hospitality vs. Huazhu Group |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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