Correlation Between Shanghai Phichem and CITIC Guoan
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By analyzing existing cross correlation between Shanghai Phichem Material and CITIC Guoan Information, you can compare the effects of market volatilities on Shanghai Phichem 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 Shanghai Phichem with a short position of CITIC Guoan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Phichem and CITIC Guoan.
Diversification Opportunities for Shanghai Phichem and CITIC Guoan
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and CITIC is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Phichem Material and CITIC Guoan Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC Guoan Information and Shanghai Phichem 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 Shanghai Phichem Material 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 Information has no effect on the direction of Shanghai Phichem i.e., Shanghai Phichem and CITIC Guoan go up and down completely randomly.
Pair Corralation between Shanghai Phichem and CITIC Guoan
Assuming the 90 days trading horizon Shanghai Phichem Material is expected to generate 0.9 times more return on investment than CITIC Guoan. However, Shanghai Phichem Material is 1.11 times less risky than CITIC Guoan. It trades about -0.37 of its potential returns per unit of risk. CITIC Guoan Information is currently generating about -0.5 per unit of risk. If you would invest 1,788 in Shanghai Phichem Material on October 12, 2024 and sell it today you would lose (294.00) from holding Shanghai Phichem Material or give up 16.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Phichem Material vs. CITIC Guoan Information
Performance |
| Timeline |
| Shanghai Phichem Material |
| CITIC Guoan Information |
Shanghai Phichem and CITIC Guoan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Phichem and CITIC Guoan
The main advantage of trading using opposite Shanghai Phichem and CITIC Guoan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Phichem 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.| Shanghai Phichem vs. Zhonghong Pulin Medical | Shanghai Phichem vs. Innovative Medical Management | Shanghai Phichem vs. GigaDevice SemiconductorBeiji | Shanghai Phichem vs. Guangdong Transtek Medical |
| CITIC Guoan vs. Ningbo Tech Bank Co | CITIC Guoan vs. GRIPM Advanced Materials | CITIC Guoan vs. GRG Banking Equipment | CITIC Guoan vs. Shanghai Phichem Material |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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