Correlation Between Dan Hotels and Shikun Binui
Can any of the company-specific risk be diversified away by investing in both Dan Hotels and Shikun Binui 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 Dan Hotels and Shikun Binui into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dan Hotels and Shikun Binui, you can compare the effects of market volatilities on Dan Hotels and Shikun Binui 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 Dan Hotels with a short position of Shikun Binui. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dan Hotels and Shikun Binui.
Diversification Opportunities for Dan Hotels and Shikun Binui
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dan and Shikun is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Dan Hotels and Shikun Binui in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shikun Binui and Dan Hotels 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 Dan Hotels are associated (or correlated) with Shikun Binui. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shikun Binui has no effect on the direction of Dan Hotels i.e., Dan Hotels and Shikun Binui go up and down completely randomly.
Pair Corralation between Dan Hotels and Shikun Binui
Assuming the 90 days trading horizon Dan Hotels is expected to generate 0.32 times more return on investment than Shikun Binui. However, Dan Hotels is 3.08 times less risky than Shikun Binui. It trades about -0.35 of its potential returns per unit of risk. Shikun Binui is currently generating about -0.37 per unit of risk. If you would invest 240,000 in Dan Hotels on January 29, 2024 and sell it today you would lose (8,500) from holding Dan Hotels or give up 3.54% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Dan Hotels vs. Shikun Binui
Performance |
Timeline |
Dan Hotels |
Shikun Binui |
Dan Hotels and Shikun Binui Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dan Hotels and Shikun Binui
The main advantage of trading using opposite Dan Hotels and Shikun Binui positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dan Hotels position performs unexpectedly, Shikun Binui 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 Shikun Binui will offset losses from the drop in Shikun Binui's long position.Dan Hotels vs. Overseas Commerce | Dan Hotels vs. Salomon A Angel | Dan Hotels vs. Globrands Group | Dan Hotels vs. Bio Meat Foodtech |
Shikun Binui vs. Paz Oil | Shikun Binui vs. First International Bank | Shikun Binui vs. Propert Buil | Shikun Binui vs. Export Inv |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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