Correlation Between CITIC Guoan and Digital China
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By analyzing existing cross correlation between CITIC Guoan Information and Digital China Information, you can compare the effects of market volatilities on CITIC Guoan and Digital China 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 CITIC Guoan with a short position of Digital China. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC Guoan and Digital China.
Diversification Opportunities for CITIC Guoan and Digital China
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CITIC and Digital is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Guoan Information and Digital China Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital China Information and CITIC Guoan 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 CITIC Guoan Information are associated (or correlated) with Digital China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital China Information has no effect on the direction of CITIC Guoan i.e., CITIC Guoan and Digital China go up and down completely randomly.
Pair Corralation between CITIC Guoan and Digital China
Assuming the 90 days trading horizon CITIC Guoan Information is expected to under-perform the Digital China. But the stock apears to be less risky and, when comparing its historical volatility, CITIC Guoan Information is 1.22 times less risky than Digital China. The stock trades about -0.04 of its potential returns per unit of risk. The Digital China Information is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,271 in Digital China Information on September 14, 2024 and sell it today you would earn a total of 136.00 from holding Digital China Information or generate 10.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CITIC Guoan Information vs. Digital China Information
Performance |
| Timeline |
| CITIC Guoan Information |
| Digital China Information |
CITIC Guoan and Digital China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITIC Guoan and Digital China
The main advantage of trading using opposite CITIC Guoan and Digital China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIC Guoan position performs unexpectedly, Digital China 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 Digital China will offset losses from the drop in Digital China's long position.| CITIC Guoan vs. Tongding Interconnection Information | CITIC Guoan vs. Leaguer Shenzhen MicroElectronics | CITIC Guoan vs. Datang HuaYin Electric | CITIC Guoan vs. Focus Media Information |
| Digital China vs. China Petroleum Chemical | Digital China vs. PetroChina Co Ltd | Digital China vs. China State Construction | Digital China vs. China Railway 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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