Correlation Between Citic Guoan and Spring Airlines
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By analyzing existing cross correlation between Citic Guoan Wine and Spring Airlines Co, you can compare the effects of market volatilities on Citic Guoan and Spring Airlines 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 Spring Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Guoan and Spring Airlines.
Diversification Opportunities for Citic Guoan and Spring Airlines
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citic and Spring is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Citic Guoan Wine and Spring Airlines Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spring Airlines 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 Spring Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spring Airlines has no effect on the direction of Citic Guoan i.e., Citic Guoan and Spring Airlines go up and down completely randomly.
Pair Corralation between Citic Guoan and Spring Airlines
Assuming the 90 days trading horizon Citic Guoan Wine is expected to under-perform the Spring Airlines. In addition to that, Citic Guoan is 1.44 times more volatile than Spring Airlines Co. It trades about -0.02 of its total potential returns per unit of risk. Spring Airlines Co is currently generating about -0.01 per unit of volatility. If you would invest 6,360 in Spring Airlines Co on October 31, 2024 and sell it today you would lose (962.00) from holding Spring Airlines Co or give up 15.13% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Citic Guoan Wine vs. Spring Airlines Co
Performance |
Timeline |
Citic Guoan Wine |
Spring Airlines |
Citic Guoan and Spring Airlines Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citic Guoan and Spring Airlines
The main advantage of trading using opposite Citic Guoan and Spring Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Guoan position performs unexpectedly, Spring Airlines 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 Spring Airlines will offset losses from the drop in Spring Airlines' long position.Citic Guoan vs. Tongxing Environmental Protection | ||
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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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