Correlation Between Citic Guoan and Beijing Bashi
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By analyzing existing cross correlation between Citic Guoan Wine and Beijing Bashi Media, you can compare the effects of market volatilities on Citic Guoan and Beijing Bashi 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 Beijing Bashi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Guoan and Beijing Bashi.
Diversification Opportunities for Citic Guoan and Beijing Bashi
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citic and Beijing is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Citic Guoan Wine and Beijing Bashi Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Bashi Media 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 Beijing Bashi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Bashi Media has no effect on the direction of Citic Guoan i.e., Citic Guoan and Beijing Bashi go up and down completely randomly.
Pair Corralation between Citic Guoan and Beijing Bashi
Assuming the 90 days trading horizon Citic Guoan is expected to generate 4.33 times less return on investment than Beijing Bashi. But when comparing it to its historical volatility, Citic Guoan Wine is 1.14 times less risky than Beijing Bashi. It trades about 0.02 of its potential returns per unit of risk. Beijing Bashi Media is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 346.00 in Beijing Bashi Media on September 3, 2024 and sell it today you would earn a total of 151.00 from holding Beijing Bashi Media or generate 43.64% 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. Beijing Bashi Media
Performance |
| Timeline |
| Citic Guoan Wine |
| Beijing Bashi Media |
Citic Guoan and Beijing Bashi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citic Guoan and Beijing Bashi
The main advantage of trading using opposite Citic Guoan and Beijing Bashi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Guoan position performs unexpectedly, Beijing Bashi 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 Beijing Bashi will offset losses from the drop in Beijing Bashi's long position.| Citic Guoan vs. Luolai Home Textile | Citic Guoan vs. Shandong Homey Aquatic | Citic Guoan vs. Fiberhome Telecommunication Technologies | Citic Guoan vs. Xiamen Goldenhome Co |
| Beijing Bashi vs. PetroChina Co Ltd | Beijing Bashi vs. China Mobile Limited | Beijing Bashi vs. Industrial and Commercial | Beijing Bashi vs. China Life Insurance |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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