Correlation Between Citic Guoan and Jilin Jlu
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By analyzing existing cross correlation between Citic Guoan Wine and Jilin Jlu Communication, you can compare the effects of market volatilities on Citic Guoan and Jilin Jlu 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 Jilin Jlu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Guoan and Jilin Jlu.
Diversification Opportunities for Citic Guoan and Jilin Jlu
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Citic and Jilin is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Citic Guoan Wine and Jilin Jlu Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jilin Jlu Communication 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 Jilin Jlu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jilin Jlu Communication has no effect on the direction of Citic Guoan i.e., Citic Guoan and Jilin Jlu go up and down completely randomly.
Pair Corralation between Citic Guoan and Jilin Jlu
Assuming the 90 days trading horizon Citic Guoan Wine is expected to generate 1.55 times more return on investment than Jilin Jlu. However, Citic Guoan is 1.55 times more volatile than Jilin Jlu Communication. It trades about 0.2 of its potential returns per unit of risk. Jilin Jlu Communication is currently generating about 0.28 per unit of risk. If you would invest 505.00 in Citic Guoan Wine on November 29, 2024 and sell it today you would earn a total of 49.00 from holding Citic Guoan Wine or generate 9.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Citic Guoan Wine vs. Jilin Jlu Communication
Performance |
Timeline |
Citic Guoan Wine |
Jilin Jlu Communication |
Citic Guoan and Jilin Jlu Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citic Guoan and Jilin Jlu
The main advantage of trading using opposite Citic Guoan and Jilin Jlu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Guoan position performs unexpectedly, Jilin Jlu 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 Jilin Jlu will offset losses from the drop in Jilin Jlu's long position.Citic Guoan vs. Liaoning Chengda Biotechnology | Citic Guoan vs. Touchstone International Medical | Citic Guoan vs. Shenzhen Bioeasy Biotechnology | Citic Guoan vs. Ping An Insurance |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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