Correlation Between Huatian Hotel and Lepu Medical
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By analyzing existing cross correlation between Huatian Hotel Group and Lepu Medical Tech, you can compare the effects of market volatilities on Huatian Hotel and Lepu Medical 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 Huatian Hotel with a short position of Lepu Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huatian Hotel and Lepu Medical.
Diversification Opportunities for Huatian Hotel and Lepu Medical
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Huatian and Lepu is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Huatian Hotel Group and Lepu Medical Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lepu Medical Tech and Huatian Hotel 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 Huatian Hotel Group are associated (or correlated) with Lepu Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lepu Medical Tech has no effect on the direction of Huatian Hotel i.e., Huatian Hotel and Lepu Medical go up and down completely randomly.
Pair Corralation between Huatian Hotel and Lepu Medical
Assuming the 90 days trading horizon Huatian Hotel is expected to generate 3.46 times less return on investment than Lepu Medical. But when comparing it to its historical volatility, Huatian Hotel Group is 1.33 times less risky than Lepu Medical. It trades about 0.04 of its potential returns per unit of risk. Lepu Medical Tech is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 973.00 in Lepu Medical Tech on September 25, 2024 and sell it today you would earn a total of 212.00 from holding Lepu Medical Tech or generate 21.79% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Huatian Hotel Group vs. Lepu Medical Tech
Performance |
Timeline |
Huatian Hotel Group |
Lepu Medical Tech |
Huatian Hotel and Lepu Medical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Huatian Hotel and Lepu Medical
The main advantage of trading using opposite Huatian Hotel and Lepu Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huatian Hotel position performs unexpectedly, Lepu Medical 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 Lepu Medical will offset losses from the drop in Lepu Medical's long position.Huatian Hotel vs. Bank of China | Huatian Hotel vs. Kweichow Moutai Co | Huatian Hotel vs. PetroChina Co Ltd | Huatian Hotel 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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