Correlation Between CITIC Securities and Cangzhou Mingzhu
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By analyzing existing cross correlation between CITIC Securities Co and Cangzhou Mingzhu Plastic, you can compare the effects of market volatilities on CITIC Securities and Cangzhou Mingzhu 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 CITIC Securities with a short position of Cangzhou Mingzhu. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC Securities and Cangzhou Mingzhu.
Diversification Opportunities for CITIC Securities and Cangzhou Mingzhu
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CITIC and Cangzhou is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Securities Co and Cangzhou Mingzhu Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cangzhou Mingzhu Plastic and CITIC Securities 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 CITIC Securities Co are associated (or correlated) with Cangzhou Mingzhu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cangzhou Mingzhu Plastic has no effect on the direction of CITIC Securities i.e., CITIC Securities and Cangzhou Mingzhu go up and down completely randomly.
Pair Corralation between CITIC Securities and Cangzhou Mingzhu
Assuming the 90 days trading horizon CITIC Securities Co is expected to under-perform the Cangzhou Mingzhu. But the stock apears to be less risky and, when comparing its historical volatility, CITIC Securities Co is 1.6 times less risky than Cangzhou Mingzhu. The stock trades about -0.08 of its potential returns per unit of risk. The Cangzhou Mingzhu Plastic is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 366.00 in Cangzhou Mingzhu Plastic on September 14, 2024 and sell it today you would earn a total of 33.00 from holding Cangzhou Mingzhu Plastic or generate 9.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CITIC Securities Co vs. Cangzhou Mingzhu Plastic
Performance |
| Timeline |
| CITIC Securities |
| Cangzhou Mingzhu Plastic |
CITIC Securities and Cangzhou Mingzhu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITIC Securities and Cangzhou Mingzhu
The main advantage of trading using opposite CITIC Securities and Cangzhou Mingzhu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIC Securities position performs unexpectedly, Cangzhou Mingzhu 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 Cangzhou Mingzhu will offset losses from the drop in Cangzhou Mingzhu's long position.The idea behind CITIC Securities Co and Cangzhou Mingzhu Plastic 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.
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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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