Correlation Between Citic Guoan and Dow Jones
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By analyzing existing cross correlation between Citic Guoan Wine and Dow Jones Industrial, you can compare the effects of market volatilities on Citic Guoan and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Guoan and Dow Jones.
Diversification Opportunities for Citic Guoan and Dow Jones
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citic and Dow is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Citic Guoan Wine and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Citic Guoan i.e., Citic Guoan and Dow Jones go up and down completely randomly.
Pair Corralation between Citic Guoan and Dow Jones
Assuming the 90 days trading horizon Citic Guoan Wine is expected to under-perform the Dow Jones. In addition to that, Citic Guoan is 4.05 times more volatile than Dow Jones Industrial. It trades about -0.01 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.12 per unit of volatility. If you would invest 3,383,361 in Dow Jones Industrial on August 31, 2024 and sell it today you would earn a total of 1,107,704 from holding Dow Jones Industrial or generate 32.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.99% |
| Values | Daily Returns |
Citic Guoan Wine vs. Dow Jones Industrial
Performance |
| Timeline |
Citic Guoan and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Citic Guoan Wine
Pair trading matchups for Citic Guoan
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Citic Guoan and Dow Jones
The main advantage of trading using opposite Citic Guoan and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Guoan position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Citic Guoan vs. Shuhua Sports Co | Citic Guoan vs. Everdisplay Optronics Shanghai | Citic Guoan vs. Xiandai Investment Co | Citic Guoan vs. Jiangsu Financial Leasing |
| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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