Correlation Between Citic Guoan and Zoje Resources
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By analyzing existing cross correlation between Citic Guoan Wine and Zoje Resources Investment, you can compare the effects of market volatilities on Citic Guoan and Zoje Resources 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 Zoje Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Guoan and Zoje Resources.
Diversification Opportunities for Citic Guoan and Zoje Resources
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citic and Zoje is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Citic Guoan Wine and Zoje Resources Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoje Resources Investment 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 Zoje Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoje Resources Investment has no effect on the direction of Citic Guoan i.e., Citic Guoan and Zoje Resources go up and down completely randomly.
Pair Corralation between Citic Guoan and Zoje Resources
Assuming the 90 days trading horizon Citic Guoan Wine is expected to under-perform the Zoje Resources. But the stock apears to be less risky and, when comparing its historical volatility, Citic Guoan Wine is 1.4 times less risky than Zoje Resources. The stock trades about -0.02 of its potential returns per unit of risk. The Zoje Resources Investment is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 119.00 in Zoje Resources Investment on October 13, 2024 and sell it today you would earn a total of 126.00 from holding Zoje Resources Investment or generate 105.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citic Guoan Wine vs. Zoje Resources Investment
Performance |
| Timeline |
| Citic Guoan Wine |
| Zoje Resources Investment |
Citic Guoan and Zoje Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citic Guoan and Zoje Resources
The main advantage of trading using opposite Citic Guoan and Zoje Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Guoan position performs unexpectedly, Zoje Resources 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 Zoje Resources will offset losses from the drop in Zoje Resources' long position.| Citic Guoan vs. Shannon Semiconductor Technology | Citic Guoan vs. Sinocat Environmental Technology | Citic Guoan vs. Anyang Iron Steel | Citic Guoan vs. Qiaoyin Environmental Tech |
| Zoje Resources vs. Ningbo Tip Rubber | Zoje Resources vs. HeBei Jinniu Chemical | Zoje Resources vs. Citic Guoan Wine | Zoje Resources vs. Shenyang Chemical Industry |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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