Correlation Between Huatian Hotel and Tjk Machinery
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By analyzing existing cross correlation between Huatian Hotel Group and Tjk Machinery Tianjin, you can compare the effects of market volatilities on Huatian Hotel and Tjk Machinery 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 Tjk Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huatian Hotel and Tjk Machinery.
Diversification Opportunities for Huatian Hotel and Tjk Machinery
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Huatian and Tjk is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Huatian Hotel Group and Tjk Machinery Tianjin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tjk Machinery Tianjin 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 Tjk Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tjk Machinery Tianjin has no effect on the direction of Huatian Hotel i.e., Huatian Hotel and Tjk Machinery go up and down completely randomly.
Pair Corralation between Huatian Hotel and Tjk Machinery
Assuming the 90 days trading horizon Huatian Hotel is expected to generate 15.83 times less return on investment than Tjk Machinery. But when comparing it to its historical volatility, Huatian Hotel Group is 1.28 times less risky than Tjk Machinery. It trades about 0.01 of its potential returns per unit of risk. Tjk Machinery Tianjin is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,095 in Tjk Machinery Tianjin on September 26, 2024 and sell it today you would earn a total of 257.00 from holding Tjk Machinery Tianjin or generate 23.47% 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. Tjk Machinery Tianjin
Performance |
Timeline |
Huatian Hotel Group |
Tjk Machinery Tianjin |
Huatian Hotel and Tjk Machinery Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Huatian Hotel and Tjk Machinery
The main advantage of trading using opposite Huatian Hotel and Tjk Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huatian Hotel position performs unexpectedly, Tjk Machinery 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 Tjk Machinery will offset losses from the drop in Tjk Machinery'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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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