Correlation Between Target and GreenTree Hospitality
Can any of the company-specific risk be diversified away by investing in both Target and GreenTree Hospitality 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 Target and GreenTree Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Target and GreenTree Hospitality Group, you can compare the effects of market volatilities on Target and GreenTree Hospitality 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 Target with a short position of GreenTree Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Target and GreenTree Hospitality.
Diversification Opportunities for Target and GreenTree Hospitality
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Target and GreenTree is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Target and GreenTree Hospitality Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenTree Hospitality and Target 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 Target are associated (or correlated) with GreenTree Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenTree Hospitality has no effect on the direction of Target i.e., Target and GreenTree Hospitality go up and down completely randomly.
Pair Corralation between Target and GreenTree Hospitality
Considering the 90-day investment horizon Target is expected to generate 0.41 times more return on investment than GreenTree Hospitality. However, Target is 2.41 times less risky than GreenTree Hospitality. It trades about -0.17 of its potential returns per unit of risk. GreenTree Hospitality Group is currently generating about -0.08 per unit of risk. If you would invest 17,266 in Target on January 25, 2024 and sell it today you would lose (732.00) from holding Target or give up 4.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Target vs. GreenTree Hospitality Group
Performance |
| Timeline |
| Target |
| GreenTree Hospitality |
Target and GreenTree Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Target and GreenTree Hospitality
The main advantage of trading using opposite Target and GreenTree Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Target position performs unexpectedly, GreenTree Hospitality 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 GreenTree Hospitality will offset losses from the drop in GreenTree Hospitality's long position.| Target vs. Costco Wholesale Corp | Target vs. BJs Wholesale Club | Target vs. Dollar Tree | Target vs. Dollar General |
| GreenTree Hospitality vs. LuxUrban Hotels | GreenTree Hospitality vs. InterContinental Hotels Group | GreenTree Hospitality vs. Atour Lifestyle Holdings | GreenTree Hospitality vs. Huazhu Group |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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