Correlation Between Jiangsu Financial and Citic Guoan
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By analyzing existing cross correlation between Jiangsu Financial Leasing and Citic Guoan Wine, you can compare the effects of market volatilities on Jiangsu Financial 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 Jiangsu Financial with a short position of Citic Guoan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Financial and Citic Guoan.
Diversification Opportunities for Jiangsu Financial and Citic Guoan
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Jiangsu and Citic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Financial Leasing 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 Jiangsu Financial 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 Jiangsu Financial Leasing 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 Jiangsu Financial i.e., Jiangsu Financial and Citic Guoan go up and down completely randomly.
Pair Corralation between Jiangsu Financial and Citic Guoan
Assuming the 90 days trading horizon Jiangsu Financial is expected to generate 1.0 times less return on investment than Citic Guoan. But when comparing it to its historical volatility, Jiangsu Financial Leasing is 1.26 times less risky than Citic Guoan. It trades about 0.08 of its potential returns per unit of risk. Citic Guoan Wine is currently generating about 0.07 of returns per unit of risk over similar time horizon. 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 | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangsu Financial Leasing vs. Citic Guoan Wine
Performance |
| Timeline |
| Jiangsu Financial Leasing |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Citic Guoan Wine |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Jiangsu Financial and Citic Guoan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangsu Financial and Citic Guoan
The main advantage of trading using opposite Jiangsu Financial and Citic Guoan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu Financial 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.The idea behind Jiangsu Financial Leasing and Citic Guoan Wine 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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