Correlation Between Gan Yuan and Citic Guoan
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By analyzing existing cross correlation between Gan Yuan Foods and Citic Guoan Wine, you can compare the effects of market volatilities on Gan Yuan 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 Gan Yuan with a short position of Citic Guoan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gan Yuan and Citic Guoan.
Diversification Opportunities for Gan Yuan and Citic Guoan
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Gan and Citic is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Gan Yuan Foods 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 Gan Yuan 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 Gan Yuan Foods 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 Gan Yuan i.e., Gan Yuan and Citic Guoan go up and down completely randomly.
Pair Corralation between Gan Yuan and Citic Guoan
Assuming the 90 days trading horizon Gan Yuan Foods is expected to generate 0.67 times more return on investment than Citic Guoan. However, Gan Yuan Foods is 1.49 times less risky than Citic Guoan. It trades about 0.08 of its potential returns per unit of risk. Citic Guoan Wine is currently generating about -0.05 per unit of risk. If you would invest 7,030 in Gan Yuan Foods on August 27, 2024 and sell it today you would earn a total of 235.00 from holding Gan Yuan Foods or generate 3.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gan Yuan Foods vs. Citic Guoan Wine
Performance |
| Timeline |
| Gan Yuan Foods |
| Citic Guoan Wine |
Gan Yuan and Citic Guoan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gan Yuan and Citic Guoan
The main advantage of trading using opposite Gan Yuan and Citic Guoan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gan Yuan 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.| Gan Yuan vs. China Petroleum Chemical | Gan Yuan vs. PetroChina Co Ltd | Gan Yuan vs. China State Construction | Gan Yuan vs. China Railway Group |
| Citic Guoan vs. BYD Co Ltd | Citic Guoan vs. China Mobile Limited | Citic Guoan vs. Agricultural Bank of | Citic Guoan vs. Industrial and Commercial |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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