Correlation Between GreenTree Hospitality and DraftKings

Can any of the company-specific risk be diversified away by investing in both GreenTree Hospitality and DraftKings 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 DraftKings 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 DraftKings, you can compare the effects of market volatilities on GreenTree Hospitality and DraftKings 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 DraftKings. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenTree Hospitality and DraftKings.

Diversification Opportunities for GreenTree Hospitality and DraftKings

0.88

Correlation Coefficient

GreenTree Hospitality  DraftKings

Very poor diversification

The 3 months correlation between GreenTree and DraftKings is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding GreenTree Hospitality Group and DraftKings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DraftKings 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 DraftKings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DraftKings has no effect on the direction of GreenTree Hospitality i.e., GreenTree Hospitality and DraftKings go up and down completely randomly.

Pair Corralation between GreenTree Hospitality and DraftKings

Considering the 90-day investment horizon GreenTree Hospitality Group is expected to under-perform the DraftKings. But the stock apears to be less risky and, when comparing its historical volatility, GreenTree Hospitality Group is 1.38 times less risky than DraftKings. The stock trades about -0.11 of its potential returns per unit of risk. The DraftKings is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  4,139  in DraftKings on February 3, 2025 and sell it today you would lose (714.00) from holding DraftKings or give up 17.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

GreenTree Hospitality Group  vs.  DraftKings

GreenTree Hospitality

Risk-Adjusted Performance

Very Weak

Over the last 90 days GreenTree Hospitality Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in June 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

DraftKings

Risk-Adjusted Performance

Very Weak

Over the last 90 days DraftKings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in June 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with GreenTree Hospitality and DraftKings

The main advantage of trading using opposite GreenTree Hospitality and DraftKings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenTree Hospitality position performs unexpectedly, DraftKings 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 DraftKings will offset losses from the drop in DraftKings' long position.

The idea behind GreenTree Hospitality Group and DraftKings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.