Correlation Between CITIC Guoan and China Railway
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By analyzing existing cross correlation between CITIC Guoan Information and China Railway Materials, you can compare the effects of market volatilities on CITIC Guoan and China Railway 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 China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC Guoan and China Railway.
Diversification Opportunities for CITIC Guoan and China Railway
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between CITIC and China is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Guoan Information and China Railway Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Railway Materials 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 China Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Railway Materials has no effect on the direction of CITIC Guoan i.e., CITIC Guoan and China Railway go up and down completely randomly.
Pair Corralation between CITIC Guoan and China Railway
Assuming the 90 days trading horizon CITIC Guoan Information is expected to generate 2.4 times more return on investment than China Railway. However, CITIC Guoan is 2.4 times more volatile than China Railway Materials. It trades about 0.1 of its potential returns per unit of risk. China Railway Materials is currently generating about 0.14 per unit of risk. If you would invest 339.00 in CITIC Guoan Information on September 5, 2024 and sell it today you would earn a total of 25.00 from holding CITIC Guoan Information or generate 7.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CITIC Guoan Information vs. China Railway Materials
Performance |
| Timeline |
| CITIC Guoan Information |
| China Railway Materials |
CITIC Guoan and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITIC Guoan and China Railway
The main advantage of trading using opposite CITIC Guoan and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIC Guoan position performs unexpectedly, China Railway 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 China Railway will offset losses from the drop in China Railway's long position.| CITIC Guoan vs. PetroChina Co Ltd | CITIC Guoan vs. China Mobile Limited | CITIC Guoan vs. CNOOC Limited | CITIC Guoan vs. Ping An Insurance |
| China Railway vs. Sinosteel Engineering and | China Railway vs. Xiamen Jihong Package | China Railway vs. Youyou Foods Co | China Railway vs. Aofu Environmental Technology |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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