Correlation Between China Citic and Xian LONGi
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By analyzing existing cross correlation between China Citic Bank and Xian LONGi Silicon, you can compare the effects of market volatilities on China Citic and Xian LONGi 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 Xian LONGi. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Citic and Xian LONGi.
Diversification Opportunities for China Citic and Xian LONGi
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Xian is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding China Citic Bank and Xian LONGi Silicon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xian LONGi Silicon 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 Xian LONGi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xian LONGi Silicon has no effect on the direction of China Citic i.e., China Citic and Xian LONGi go up and down completely randomly.
Pair Corralation between China Citic and Xian LONGi
Assuming the 90 days trading horizon China Citic Bank is expected to under-perform the Xian LONGi. But the stock apears to be less risky and, when comparing its historical volatility, China Citic Bank is 2.51 times less risky than Xian LONGi. The stock trades about -0.16 of its potential returns per unit of risk. The Xian LONGi Silicon is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 1,490 in Xian LONGi Silicon on November 28, 2024 and sell it today you would earn a total of 253.00 from holding Xian LONGi Silicon or generate 16.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
China Citic Bank vs. Xian LONGi Silicon
Performance |
| Timeline |
| China Citic Bank |
| Xian LONGi Silicon |
China Citic and Xian LONGi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Citic and Xian LONGi
The main advantage of trading using opposite China Citic and Xian LONGi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Citic position performs unexpectedly, Xian LONGi 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 Xian LONGi will offset losses from the drop in Xian LONGi's long position.| China Citic vs. Muyuan Foodstuff Co | China Citic vs. Fujian Anjoy Foods | China Citic vs. Semiconductor Manufacturing Intl | China Citic vs. StarPower Semiconductor |
| Xian LONGi vs. Qingdao Foods Co | Xian LONGi vs. Servyou Software Group | Xian LONGi vs. Xiamen Jihong Package | Xian LONGi vs. Glodon Software 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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