Correlation Between CITIC Guoan and Shanghai Electric
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By analyzing existing cross correlation between CITIC Guoan Information and Shanghai Electric Group, you can compare the effects of market volatilities on CITIC Guoan and Shanghai Electric 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 Shanghai Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC Guoan and Shanghai Electric.
Diversification Opportunities for CITIC Guoan and Shanghai Electric
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between CITIC and Shanghai is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Guoan Information and Shanghai Electric Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Electric 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 Shanghai Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Electric has no effect on the direction of CITIC Guoan i.e., CITIC Guoan and Shanghai Electric go up and down completely randomly.
Pair Corralation between CITIC Guoan and Shanghai Electric
Assuming the 90 days trading horizon CITIC Guoan is expected to generate 1.67 times less return on investment than Shanghai Electric. But when comparing it to its historical volatility, CITIC Guoan Information is 1.08 times less risky than Shanghai Electric. It trades about 0.08 of its potential returns per unit of risk. Shanghai Electric Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 426.00 in Shanghai Electric Group on September 4, 2024 and sell it today you would earn a total of 509.00 from holding Shanghai Electric Group or generate 119.48% 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. Shanghai Electric Group
Performance |
| Timeline |
| CITIC Guoan Information |
| Shanghai Electric |
CITIC Guoan and Shanghai Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITIC Guoan and Shanghai Electric
The main advantage of trading using opposite CITIC Guoan and Shanghai Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIC Guoan position performs unexpectedly, Shanghai Electric 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 Shanghai Electric will offset losses from the drop in Shanghai Electric's long position.| CITIC Guoan vs. Zhejiang Qianjiang Motorcycle | CITIC Guoan vs. Hubei Dinglong Chemical | CITIC Guoan vs. Haima Automobile Group | CITIC Guoan vs. Jiangsu Xinri E Vehicle |
| Shanghai Electric vs. Chengdu Kanghua Biological | Shanghai Electric vs. Beijing Wantai Biological | Shanghai Electric vs. Suzhou Novoprotein Scientific | Shanghai Electric vs. Aluminum Corp of |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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