Correlation Between Beijing Wantai and Citic Guoan
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By analyzing existing cross correlation between Beijing Wantai Biological and Citic Guoan Wine, you can compare the effects of market volatilities on Beijing Wantai 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 Beijing Wantai with a short position of Citic Guoan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Wantai and Citic Guoan.
Diversification Opportunities for Beijing Wantai and Citic Guoan
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Beijing and Citic is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Wantai Biological 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 Beijing Wantai 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 Beijing Wantai Biological 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 Beijing Wantai i.e., Beijing Wantai and Citic Guoan go up and down completely randomly.
Pair Corralation between Beijing Wantai and Citic Guoan
Assuming the 90 days trading horizon Beijing Wantai Biological is expected to generate 0.97 times more return on investment than Citic Guoan. However, Beijing Wantai Biological is 1.03 times less risky than Citic Guoan. It trades about -0.12 of its potential returns per unit of risk. Citic Guoan Wine is currently generating about -0.13 per unit of risk. If you would invest 7,205 in Beijing Wantai Biological on October 29, 2024 and sell it today you would lose (359.00) from holding Beijing Wantai Biological or give up 4.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Wantai Biological vs. Citic Guoan Wine
Performance |
| Timeline |
| Beijing Wantai Biological |
| Citic Guoan Wine |
Beijing Wantai and Citic Guoan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Wantai and Citic Guoan
The main advantage of trading using opposite Beijing Wantai and Citic Guoan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Wantai 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.| Beijing Wantai vs. Shaanxi Broadcast TV | Beijing Wantai vs. Fujian Longzhou Transportation | Beijing Wantai vs. Hubeiyichang Transportation Group | Beijing Wantai vs. Jiangsu Broadcasting Cable |
| Citic Guoan vs. Offshore Oil Engineering | Citic Guoan vs. Beijing Kingsoft Office | Citic Guoan vs. Jiangsu Phoenix Publishing | Citic Guoan vs. MayAir Technology 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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