Correlation Between Citic Guoan and Kingclean Electric
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By analyzing existing cross correlation between Citic Guoan Wine and Kingclean Electric Co, you can compare the effects of market volatilities on Citic Guoan and Kingclean Electric 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 Kingclean Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Guoan and Kingclean Electric.
Diversification Opportunities for Citic Guoan and Kingclean Electric
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citic and Kingclean is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Citic Guoan Wine and Kingclean Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingclean Electric 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 Kingclean Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingclean Electric has no effect on the direction of Citic Guoan i.e., Citic Guoan and Kingclean Electric go up and down completely randomly.
Pair Corralation between Citic Guoan and Kingclean Electric
Assuming the 90 days trading horizon Citic Guoan is expected to generate 1.78 times less return on investment than Kingclean Electric. But when comparing it to its historical volatility, Citic Guoan Wine is 1.17 times less risky than Kingclean Electric. It trades about 0.07 of its potential returns per unit of risk. Kingclean Electric Co is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,243 in Kingclean Electric Co on November 7, 2024 and sell it today you would earn a total of 76.00 from holding Kingclean Electric Co or generate 3.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citic Guoan Wine vs. Kingclean Electric Co
Performance |
| Timeline |
| Citic Guoan Wine |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Kingclean Electric |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Citic Guoan and Kingclean Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citic Guoan and Kingclean Electric
The main advantage of trading using opposite Citic Guoan and Kingclean Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Guoan position performs unexpectedly, Kingclean Electric 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 Kingclean Electric will offset losses from the drop in Kingclean Electric's long position.The idea behind Citic Guoan Wine and Kingclean Electric 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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