Correlation Between Citic Guoan and Dongguan Tarry
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By analyzing existing cross correlation between Citic Guoan Wine and Dongguan Tarry Electronics, you can compare the effects of market volatilities on Citic Guoan and Dongguan Tarry 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 Dongguan Tarry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Guoan and Dongguan Tarry.
Diversification Opportunities for Citic Guoan and Dongguan Tarry
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Citic and Dongguan is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Citic Guoan Wine and Dongguan Tarry Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongguan Tarry Elect 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 Dongguan Tarry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongguan Tarry Elect has no effect on the direction of Citic Guoan i.e., Citic Guoan and Dongguan Tarry go up and down completely randomly.
Pair Corralation between Citic Guoan and Dongguan Tarry
Assuming the 90 days trading horizon Citic Guoan Wine is expected to under-perform the Dongguan Tarry. But the stock apears to be less risky and, when comparing its historical volatility, Citic Guoan Wine is 1.72 times less risky than Dongguan Tarry. The stock trades about -0.31 of its potential returns per unit of risk. The Dongguan Tarry Electronics is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 6,302 in Dongguan Tarry Electronics on October 11, 2024 and sell it today you would earn a total of 238.00 from holding Dongguan Tarry Electronics or generate 3.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citic Guoan Wine vs. Dongguan Tarry Electronics
Performance |
| Timeline |
| Citic Guoan Wine |
| Dongguan Tarry Elect |
Citic Guoan and Dongguan Tarry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citic Guoan and Dongguan Tarry
The main advantage of trading using opposite Citic Guoan and Dongguan Tarry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Guoan position performs unexpectedly, Dongguan Tarry 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 Dongguan Tarry will offset losses from the drop in Dongguan Tarry's long position.| Citic Guoan vs. Chongqing Shunbo Aluminum | Citic Guoan vs. Cultural Investment Holdings | Citic Guoan vs. Xiandai Investment Co | Citic Guoan vs. Jiaozuo Wanfang Aluminum |
| Dongguan Tarry vs. Longjian Road Bridge | Dongguan Tarry vs. Hubeiyichang Transportation Group | Dongguan Tarry vs. Citic Guoan Wine | Dongguan Tarry vs. Anhui Gujing Distillery |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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