Correlation Between Caihong Display and Citic Guoan
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By analyzing existing cross correlation between Caihong Display Devices and Citic Guoan Wine, you can compare the effects of market volatilities on Caihong Display and Citic Guoan 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 Caihong Display with a short position of Citic Guoan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caihong Display and Citic Guoan.
Diversification Opportunities for Caihong Display and Citic Guoan
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Caihong and Citic is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Caihong Display Devices and Citic Guoan Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citic Guoan Wine and Caihong Display 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 Caihong Display Devices are associated (or correlated) with Citic Guoan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citic Guoan Wine has no effect on the direction of Caihong Display i.e., Caihong Display and Citic Guoan go up and down completely randomly.
Pair Corralation between Caihong Display and Citic Guoan
Assuming the 90 days trading horizon Caihong Display Devices is expected to generate 1.07 times more return on investment than Citic Guoan. However, Caihong Display is 1.07 times more volatile than Citic Guoan Wine. It trades about 0.06 of its potential returns per unit of risk. Citic Guoan Wine is currently generating about -0.02 per unit of risk. If you would invest 458.00 in Caihong Display Devices on November 5, 2024 and sell it today you would earn a total of 390.00 from holding Caihong Display Devices or generate 85.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caihong Display Devices vs. Citic Guoan Wine
Performance |
| Timeline |
| Caihong Display Devices |
| Citic Guoan Wine |
Caihong Display and Citic Guoan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caihong Display and Citic Guoan
The main advantage of trading using opposite Caihong Display and Citic Guoan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caihong Display position performs unexpectedly, Citic Guoan 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 Citic Guoan will offset losses from the drop in Citic Guoan's long position.| Caihong Display vs. Nanjing Putian Telecommunications | Caihong Display vs. Cloud Live Technology | Caihong Display vs. Shenzhen Coship Electronics | Caihong Display vs. Shenzhen Hifuture Electric |
| Citic Guoan vs. Qtone Education Group | Citic Guoan vs. Dongfeng Automobile Co | Citic Guoan vs. Jiangsu Xinri E Vehicle | Citic Guoan vs. Anhui Deli Household |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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