Correlation Between Sanxiang Advanced and Citic Guoan
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By analyzing existing cross correlation between Sanxiang Advanced Materials and Citic Guoan Wine, you can compare the effects of market volatilities on Sanxiang Advanced 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 Sanxiang Advanced with a short position of Citic Guoan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanxiang Advanced and Citic Guoan.
Diversification Opportunities for Sanxiang Advanced and Citic Guoan
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sanxiang and Citic is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Sanxiang Advanced Materials 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 Sanxiang Advanced 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 Sanxiang Advanced Materials 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 Sanxiang Advanced i.e., Sanxiang Advanced and Citic Guoan go up and down completely randomly.
Pair Corralation between Sanxiang Advanced and Citic Guoan
Assuming the 90 days trading horizon Sanxiang Advanced Materials is expected to generate 1.42 times more return on investment than Citic Guoan. However, Sanxiang Advanced is 1.42 times more volatile than Citic Guoan Wine. It trades about 0.01 of its potential returns per unit of risk. Citic Guoan Wine is currently generating about -0.02 per unit of risk. If you would invest 1,754 in Sanxiang Advanced Materials on August 29, 2024 and sell it today you would lose (20.00) from holding Sanxiang Advanced Materials or give up 1.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sanxiang Advanced Materials vs. Citic Guoan Wine
Performance |
| Timeline |
| Sanxiang Advanced |
| Citic Guoan Wine |
Sanxiang Advanced and Citic Guoan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanxiang Advanced and Citic Guoan
The main advantage of trading using opposite Sanxiang Advanced and Citic Guoan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanxiang Advanced 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.| Sanxiang Advanced vs. Anhui Jianghuai Automobile | Sanxiang Advanced vs. Tongyu Communication | Sanxiang Advanced vs. Changchun Faway Automobile | Sanxiang Advanced vs. Sinomach Automobile Co |
| Citic Guoan vs. Rising Nonferrous Metals | Citic Guoan vs. Shanghai Yanpu Metal | Citic Guoan vs. Glodon Software Co | Citic Guoan vs. ZYF Lopsking Aluminum |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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