Correlation Between CITIC Guoan and Beijing Watertek
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By analyzing existing cross correlation between CITIC Guoan Information and Beijing Watertek Information, you can compare the effects of market volatilities on CITIC Guoan and Beijing Watertek 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 Beijing Watertek. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC Guoan and Beijing Watertek.
Diversification Opportunities for CITIC Guoan and Beijing Watertek
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CITIC and Beijing is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Guoan Information and Beijing Watertek Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Watertek Inf 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 Beijing Watertek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Watertek Inf has no effect on the direction of CITIC Guoan i.e., CITIC Guoan and Beijing Watertek go up and down completely randomly.
Pair Corralation between CITIC Guoan and Beijing Watertek
Assuming the 90 days trading horizon CITIC Guoan Information is expected to generate 0.69 times more return on investment than Beijing Watertek. However, CITIC Guoan Information is 1.45 times less risky than Beijing Watertek. It trades about -0.21 of its potential returns per unit of risk. Beijing Watertek Information is currently generating about -0.18 per unit of risk. If you would invest 339.00 in CITIC Guoan Information on October 18, 2024 and sell it today you would lose (42.00) from holding CITIC Guoan Information or give up 12.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CITIC Guoan Information vs. Beijing Watertek Information
Performance |
| Timeline |
| CITIC Guoan Information |
| Beijing Watertek Inf |
CITIC Guoan and Beijing Watertek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITIC Guoan and Beijing Watertek
The main advantage of trading using opposite CITIC Guoan and Beijing Watertek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIC Guoan position performs unexpectedly, Beijing Watertek 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 Beijing Watertek will offset losses from the drop in Beijing Watertek's long position.| CITIC Guoan vs. Marssenger Kitchenware Co | CITIC Guoan vs. Cangzhou Mingzhu Plastic | CITIC Guoan vs. BTG Hotels Group | CITIC Guoan vs. Ningbo Tip Rubber |
| Beijing Watertek vs. Invengo Information Technology | Beijing Watertek vs. HaiXin Foods Co | Beijing Watertek vs. AVCON Information Tech | Beijing Watertek vs. Fujian Anjoy Foods |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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