Correlation Between Jiangxi Hengda and Citic Guoan
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By analyzing existing cross correlation between Jiangxi Hengda Hi Tech and Citic Guoan Wine, you can compare the effects of market volatilities on Jiangxi Hengda 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 Jiangxi Hengda with a short position of Citic Guoan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangxi Hengda and Citic Guoan.
Diversification Opportunities for Jiangxi Hengda and Citic Guoan
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Jiangxi and Citic is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Jiangxi Hengda Hi Tech 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 Jiangxi Hengda 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 Jiangxi Hengda Hi Tech 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 Jiangxi Hengda i.e., Jiangxi Hengda and Citic Guoan go up and down completely randomly.
Pair Corralation between Jiangxi Hengda and Citic Guoan
Assuming the 90 days trading horizon Jiangxi Hengda Hi Tech is expected to generate 1.08 times more return on investment than Citic Guoan. However, Jiangxi Hengda is 1.08 times more volatile than Citic Guoan Wine. It trades about 0.03 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 506.00 in Jiangxi Hengda Hi Tech on August 28, 2024 and sell it today you would earn a total of 49.00 from holding Jiangxi Hengda Hi Tech or generate 9.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangxi Hengda Hi Tech vs. Citic Guoan Wine
Performance |
| Timeline |
| Jiangxi Hengda Hi |
| Citic Guoan Wine |
Jiangxi Hengda and Citic Guoan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangxi Hengda and Citic Guoan
The main advantage of trading using opposite Jiangxi Hengda and Citic Guoan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangxi Hengda 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.| Jiangxi Hengda vs. CareRay Digital Medical | Jiangxi Hengda vs. Sino Medical Sciences | Jiangxi Hengda vs. Hengkang Medical Group | Jiangxi Hengda vs. Jiangsu Jinling Sports |
| Citic Guoan vs. Rising Nonferrous Metals | Citic Guoan vs. Shanghai Yanpu Metal | Citic Guoan vs. Glodon Software Co | Citic Guoan vs. ZYF Lopsking Aluminum |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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