Correlation Between Shanghai Electric and CITIC Guoan
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By analyzing existing cross correlation between Shanghai Electric Group and CITIC Guoan Information, you can compare the effects of market volatilities on Shanghai Electric 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 Shanghai Electric with a short position of CITIC Guoan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Electric and CITIC Guoan.
Diversification Opportunities for Shanghai Electric and CITIC Guoan
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shanghai and CITIC is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Electric Group and CITIC Guoan Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC Guoan Information and Shanghai Electric 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 Shanghai Electric Group 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 Information has no effect on the direction of Shanghai Electric i.e., Shanghai Electric and CITIC Guoan go up and down completely randomly.
Pair Corralation between Shanghai Electric and CITIC Guoan
Assuming the 90 days trading horizon Shanghai Electric Group is expected to generate 1.08 times more return on investment than CITIC Guoan. However, Shanghai Electric is 1.08 times more volatile than CITIC Guoan Information. It trades about 0.12 of its potential returns per unit of risk. CITIC Guoan Information is currently generating about 0.08 per unit of risk. If you would invest 426.00 in Shanghai Electric Group on September 4, 2024 and sell it today you would earn a total of 509.00 from holding Shanghai Electric Group or generate 119.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Electric Group vs. CITIC Guoan Information
Performance |
| Timeline |
| Shanghai Electric |
| CITIC Guoan Information |
Shanghai Electric and CITIC Guoan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Electric and CITIC Guoan
The main advantage of trading using opposite Shanghai Electric and CITIC Guoan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Electric 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.| Shanghai Electric vs. Chengdu Kanghua Biological | Shanghai Electric vs. Beijing Wantai Biological | Shanghai Electric vs. Suzhou Novoprotein Scientific | Shanghai Electric vs. Aluminum Corp of |
| CITIC Guoan vs. Zhejiang Qianjiang Motorcycle | CITIC Guoan vs. Hubei Dinglong Chemical | CITIC Guoan vs. Haima Automobile Group | CITIC Guoan vs. Jiangsu Xinri E Vehicle |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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