Correlation Between Citic Guoan and Sanxiang Advanced
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By analyzing existing cross correlation between Citic Guoan Wine and Sanxiang Advanced Materials, you can compare the effects of market volatilities on Citic Guoan and Sanxiang Advanced 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 Sanxiang Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Guoan and Sanxiang Advanced.
Diversification Opportunities for Citic Guoan and Sanxiang Advanced
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Citic and Sanxiang is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Citic Guoan Wine and Sanxiang Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanxiang Advanced 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 Sanxiang Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanxiang Advanced has no effect on the direction of Citic Guoan i.e., Citic Guoan and Sanxiang Advanced go up and down completely randomly.
Pair Corralation between Citic Guoan and Sanxiang Advanced
Assuming the 90 days trading horizon Citic Guoan Wine is expected to generate 0.69 times more return on investment than Sanxiang Advanced. However, Citic Guoan Wine is 1.45 times less risky than Sanxiang Advanced. It trades about 0.11 of its potential returns per unit of risk. Sanxiang Advanced Materials is currently generating about -0.01 per unit of risk. If you would invest 581.00 in Citic Guoan Wine on September 1, 2024 and sell it today you would earn a total of 38.00 from holding Citic Guoan Wine or generate 6.54% 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. Sanxiang Advanced Materials
Performance |
| Timeline |
| Citic Guoan Wine |
| Sanxiang Advanced |
Citic Guoan and Sanxiang Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citic Guoan and Sanxiang Advanced
The main advantage of trading using opposite Citic Guoan and Sanxiang Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Guoan position performs unexpectedly, Sanxiang Advanced 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 Sanxiang Advanced will offset losses from the drop in Sanxiang Advanced's long position.| Citic Guoan vs. Xinjiang Baodi Mining | Citic Guoan vs. Minmetals Capital Co | Citic Guoan vs. Lutian Machinery Co | Citic Guoan vs. Shanghai Rightongene Biotechnology |
| Sanxiang Advanced vs. Ligao Foods CoLtd | Sanxiang Advanced vs. Great Sun Foods Co | Sanxiang Advanced vs. Anji Foodstuff Co | Sanxiang Advanced vs. Hengdian Entertainment Co |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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