Correlation Between CITIC Metal and Guangdong TianYiMa
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By analyzing existing cross correlation between CITIC Metal Co and Guangdong TianYiMa Information, you can compare the effects of market volatilities on CITIC Metal and Guangdong TianYiMa 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 Metal with a short position of Guangdong TianYiMa. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC Metal and Guangdong TianYiMa.
Diversification Opportunities for CITIC Metal and Guangdong TianYiMa
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CITIC and Guangdong is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Metal Co and Guangdong TianYiMa Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong TianYiMa and CITIC Metal 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 Metal Co are associated (or correlated) with Guangdong TianYiMa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong TianYiMa has no effect on the direction of CITIC Metal i.e., CITIC Metal and Guangdong TianYiMa go up and down completely randomly.
Pair Corralation between CITIC Metal and Guangdong TianYiMa
Assuming the 90 days trading horizon CITIC Metal is expected to generate 6.51 times less return on investment than Guangdong TianYiMa. But when comparing it to its historical volatility, CITIC Metal Co is 3.27 times less risky than Guangdong TianYiMa. It trades about 0.13 of its potential returns per unit of risk. Guangdong TianYiMa Information is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 2,459 in Guangdong TianYiMa Information on November 7, 2024 and sell it today you would earn a total of 276.00 from holding Guangdong TianYiMa Information or generate 11.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CITIC Metal Co vs. Guangdong TianYiMa Information
Performance |
| Timeline |
| CITIC Metal |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Guangdong TianYiMa |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CITIC Metal and Guangdong TianYiMa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITIC Metal and Guangdong TianYiMa
The main advantage of trading using opposite CITIC Metal and Guangdong TianYiMa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIC Metal position performs unexpectedly, Guangdong TianYiMa 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 Guangdong TianYiMa will offset losses from the drop in Guangdong TianYiMa's long position.The idea behind CITIC Metal Co and Guangdong TianYiMa Information 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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