Correlation Between Citic Guoan and CITIC Guoan
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By analyzing existing cross correlation between Citic Guoan Wine and CITIC Guoan Information, you can compare the effects of market volatilities on Citic Guoan 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 Citic Guoan with a short position of CITIC Guoan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Guoan and CITIC Guoan.
Diversification Opportunities for Citic Guoan and CITIC Guoan
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citic and CITIC is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Citic Guoan Wine 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 Citic Guoan 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 Guoan Wine 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 Citic Guoan i.e., Citic Guoan and CITIC Guoan go up and down completely randomly.
Pair Corralation between Citic Guoan and CITIC Guoan
Assuming the 90 days trading horizon Citic Guoan Wine is expected to under-perform the CITIC Guoan. In addition to that, Citic Guoan is 1.0 times more volatile than CITIC Guoan Information. It trades about -0.02 of its total potential returns per unit of risk. CITIC Guoan Information is currently generating about 0.02 per unit of volatility. If you would invest 253.00 in CITIC Guoan Information on November 7, 2024 and sell it today you would earn a total of 35.00 from holding CITIC Guoan Information or generate 13.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citic Guoan Wine vs. CITIC Guoan Information
Performance |
| Timeline |
| Citic Guoan Wine |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CITIC Guoan Information |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Citic Guoan and CITIC Guoan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citic Guoan and CITIC Guoan
The main advantage of trading using opposite Citic Guoan and CITIC Guoan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Guoan 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.The idea behind Citic Guoan Wine and CITIC Guoan Information 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.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 Stocks Directory module to find actively traded stocks across global markets.
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