Correlation Between Xinjiang Baodi and Citic Guoan
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By analyzing existing cross correlation between Xinjiang Baodi Mining and Citic Guoan Wine, you can compare the effects of market volatilities on Xinjiang Baodi 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 Xinjiang Baodi with a short position of Citic Guoan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Baodi and Citic Guoan.
Diversification Opportunities for Xinjiang Baodi and Citic Guoan
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Xinjiang and Citic is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Baodi Mining 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 Xinjiang Baodi 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 Xinjiang Baodi Mining 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 Xinjiang Baodi i.e., Xinjiang Baodi and Citic Guoan go up and down completely randomly.
Pair Corralation between Xinjiang Baodi and Citic Guoan
Assuming the 90 days trading horizon Xinjiang Baodi is expected to generate 1.35 times less return on investment than Citic Guoan. But when comparing it to its historical volatility, Xinjiang Baodi Mining is 1.12 times less risky than Citic Guoan. It trades about 0.13 of its potential returns per unit of risk. Citic Guoan Wine is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 568.00 in Citic Guoan Wine on September 3, 2024 and sell it today you would earn a total of 51.00 from holding Citic Guoan Wine or generate 8.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinjiang Baodi Mining vs. Citic Guoan Wine
Performance |
| Timeline |
| Xinjiang Baodi Mining |
| Citic Guoan Wine |
Xinjiang Baodi and Citic Guoan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Baodi and Citic Guoan
The main advantage of trading using opposite Xinjiang Baodi and Citic Guoan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Baodi 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.| Xinjiang Baodi vs. Zijin Mining Group | Xinjiang Baodi vs. Baoshan Iron Steel | Xinjiang Baodi vs. Rongsheng Petrochemical Co | Xinjiang Baodi vs. Hoshine Silicon Ind |
| Citic Guoan vs. Luolai Home Textile | Citic Guoan vs. Shandong Homey Aquatic | Citic Guoan vs. Fiberhome Telecommunication Technologies | Citic Guoan vs. Xiamen Goldenhome 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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