Correlation Between City Development and Citic Guoan
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By analyzing existing cross correlation between City Development Environment and Citic Guoan Wine, you can compare the effects of market volatilities on City Development and Citic Guoan 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 City Development with a short position of Citic Guoan. Check out your portfolio center. Please also check ongoing floating volatility patterns of City Development and Citic Guoan.
Diversification Opportunities for City Development and Citic Guoan
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between City and Citic is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding City Development Environment and Citic Guoan Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citic Guoan Wine and City Development 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 City Development Environment are associated (or correlated) with Citic Guoan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citic Guoan Wine has no effect on the direction of City Development i.e., City Development and Citic Guoan go up and down completely randomly.
Pair Corralation between City Development and Citic Guoan
Assuming the 90 days trading horizon City Development Environment is expected to generate 0.51 times more return on investment than Citic Guoan. However, City Development Environment is 1.95 times less risky than Citic Guoan. It trades about -0.24 of its potential returns per unit of risk. Citic Guoan Wine is currently generating about -0.14 per unit of risk. If you would invest 1,330 in City Development Environment on October 26, 2024 and sell it today you would lose (80.00) from holding City Development Environment or give up 6.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
City Development Environment vs. Citic Guoan Wine
Performance |
| Timeline |
| City Development Env |
| Citic Guoan Wine |
City Development and Citic Guoan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City Development and Citic Guoan
The main advantage of trading using opposite City Development and Citic Guoan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City Development position performs unexpectedly, Citic Guoan 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 Citic Guoan will offset losses from the drop in Citic Guoan's long position.| City Development vs. Rising Nonferrous Metals | City Development vs. Anhui Tongguan Copper | City Development vs. Shanghai Yanpu Metal | City Development vs. JCHX Mining Management |
| Citic Guoan vs. Sanxiang Advanced Materials | Citic Guoan vs. Caihong Display Devices | Citic Guoan vs. Sportsoul Co Ltd | Citic Guoan vs. Guangzhou Tinci Materials |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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