Correlation Between Guangzhou KingTeller and Citic Guoan
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By analyzing existing cross correlation between Guangzhou KingTeller Technology and Citic Guoan Wine, you can compare the effects of market volatilities on Guangzhou KingTeller 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 Guangzhou KingTeller with a short position of Citic Guoan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou KingTeller and Citic Guoan.
Diversification Opportunities for Guangzhou KingTeller and Citic Guoan
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guangzhou and Citic is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou KingTeller Technolog 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 Guangzhou KingTeller 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 Guangzhou KingTeller Technology 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 Guangzhou KingTeller i.e., Guangzhou KingTeller and Citic Guoan go up and down completely randomly.
Pair Corralation between Guangzhou KingTeller and Citic Guoan
Assuming the 90 days trading horizon Guangzhou KingTeller Technology is expected to generate 1.24 times more return on investment than Citic Guoan. However, Guangzhou KingTeller is 1.24 times more volatile than Citic Guoan Wine. It trades about 0.07 of its potential returns per unit of risk. Citic Guoan Wine is currently generating about -0.01 per unit of risk. If you would invest 428.00 in Guangzhou KingTeller Technology on September 12, 2024 and sell it today you would earn a total of 235.00 from holding Guangzhou KingTeller Technology or generate 54.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou KingTeller Technolog vs. Citic Guoan Wine
Performance |
| Timeline |
| Guangzhou KingTeller |
| Citic Guoan Wine |
Guangzhou KingTeller and Citic Guoan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou KingTeller and Citic Guoan
The main advantage of trading using opposite Guangzhou KingTeller and Citic Guoan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou KingTeller 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.The idea behind Guangzhou KingTeller Technology and Citic Guoan Wine pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Citic Guoan vs. China Petroleum Chemical | Citic Guoan vs. PetroChina Co Ltd | Citic Guoan vs. China State Construction | Citic Guoan 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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