Correlation Between Citic Guoan and Cinda Securities
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By analyzing existing cross correlation between Citic Guoan Wine and Cinda Securities Co, you can compare the effects of market volatilities on Citic Guoan and Cinda Securities 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 Cinda Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Guoan and Cinda Securities.
Diversification Opportunities for Citic Guoan and Cinda Securities
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citic and Cinda is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Citic Guoan Wine and Cinda Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cinda Securities 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 Cinda Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cinda Securities has no effect on the direction of Citic Guoan i.e., Citic Guoan and Cinda Securities go up and down completely randomly.
Pair Corralation between Citic Guoan and Cinda Securities
Assuming the 90 days trading horizon Citic Guoan Wine is expected to generate 1.31 times more return on investment than Cinda Securities. However, Citic Guoan is 1.31 times more volatile than Cinda Securities Co. It trades about 0.07 of its potential returns per unit of risk. Cinda Securities Co is currently generating about -0.23 per unit of risk. If you would invest 492.00 in Citic Guoan Wine on November 7, 2024 and sell it today you would earn a total of 9.00 from holding Citic Guoan Wine or generate 1.83% 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. Cinda Securities Co
Performance |
| Timeline |
| Citic Guoan Wine |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Cinda Securities |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Citic Guoan and Cinda Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citic Guoan and Cinda Securities
The main advantage of trading using opposite Citic Guoan and Cinda Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Guoan position performs unexpectedly, Cinda Securities 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 Cinda Securities will offset losses from the drop in Cinda Securities' long position.The idea behind Citic Guoan Wine and Cinda Securities Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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