Correlation Between Guangdong Shenglu and Citic Guoan
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By analyzing existing cross correlation between Guangdong Shenglu Telecommunication and Citic Guoan Wine, you can compare the effects of market volatilities on Guangdong Shenglu 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 Guangdong Shenglu with a short position of Citic Guoan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Shenglu and Citic Guoan.
Diversification Opportunities for Guangdong Shenglu and Citic Guoan
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guangdong and Citic is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Shenglu Telecommunic 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 Guangdong Shenglu 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 Guangdong Shenglu Telecommunication 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 Guangdong Shenglu i.e., Guangdong Shenglu and Citic Guoan go up and down completely randomly.
Pair Corralation between Guangdong Shenglu and Citic Guoan
Assuming the 90 days trading horizon Guangdong Shenglu is expected to generate 1.01 times less return on investment than Citic Guoan. But when comparing it to its historical volatility, Guangdong Shenglu Telecommunication is 1.15 times less risky than Citic Guoan. It trades about 0.06 of its potential returns per unit of risk. Citic Guoan Wine is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 532.00 in Citic Guoan Wine on September 1, 2024 and sell it today you would earn a total of 87.00 from holding Citic Guoan Wine or generate 16.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Shenglu Telecommunic vs. Citic Guoan Wine
Performance |
| Timeline |
| Guangdong Shenglu |
| Citic Guoan Wine |
Guangdong Shenglu and Citic Guoan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Shenglu and Citic Guoan
The main advantage of trading using opposite Guangdong Shenglu and Citic Guoan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Shenglu 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.| Guangdong Shenglu vs. Guocheng Mining Co | Guangdong Shenglu vs. Beijing SPC Environment | Guangdong Shenglu vs. Uroica Mining Safety | Guangdong Shenglu vs. Tongxing Environmental Protection |
| Citic Guoan vs. Xinjiang Baodi Mining | Citic Guoan vs. Minmetals Capital Co | Citic Guoan vs. Lutian Machinery Co | Citic Guoan vs. Shanghai Rightongene Biotechnology |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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