Correlation Between China Citic and Sanan Optoelectronics
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By analyzing existing cross correlation between China Citic Bank and Sanan Optoelectronics Co, you can compare the effects of market volatilities on China Citic and Sanan Optoelectronics 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 China Citic with a short position of Sanan Optoelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Citic and Sanan Optoelectronics.
Diversification Opportunities for China Citic and Sanan Optoelectronics
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Sanan is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding China Citic Bank and Sanan Optoelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanan Optoelectronics and China Citic 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 China Citic Bank are associated (or correlated) with Sanan Optoelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanan Optoelectronics has no effect on the direction of China Citic i.e., China Citic and Sanan Optoelectronics go up and down completely randomly.
Pair Corralation between China Citic and Sanan Optoelectronics
Assuming the 90 days trading horizon China Citic Bank is expected to generate 0.86 times more return on investment than Sanan Optoelectronics. However, China Citic Bank is 1.17 times less risky than Sanan Optoelectronics. It trades about 0.07 of its potential returns per unit of risk. Sanan Optoelectronics Co is currently generating about 0.01 per unit of risk. If you would invest 525.00 in China Citic Bank on September 14, 2024 and sell it today you would earn a total of 168.00 from holding China Citic Bank or generate 32.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Citic Bank vs. Sanan Optoelectronics Co
Performance |
| Timeline |
| China Citic Bank |
| Sanan Optoelectronics |
China Citic and Sanan Optoelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Citic and Sanan Optoelectronics
The main advantage of trading using opposite China Citic and Sanan Optoelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Citic position performs unexpectedly, Sanan Optoelectronics 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 Sanan Optoelectronics will offset losses from the drop in Sanan Optoelectronics' long position.| China Citic vs. Guangdong Qunxing Toys | China Citic vs. Haima Automobile Group | China Citic vs. Shandong Iron and | China Citic vs. Anhui Jianghuai Automobile |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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