Correlation Between Shanghai Yanpu and Citic Guoan
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By analyzing existing cross correlation between Shanghai Yanpu Metal and Citic Guoan Wine, you can compare the effects of market volatilities on Shanghai Yanpu 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 Yanpu with a short position of Citic Guoan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Yanpu and Citic Guoan.
Diversification Opportunities for Shanghai Yanpu and Citic Guoan
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanghai and Citic is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Yanpu Metal 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 Shanghai Yanpu 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 Yanpu Metal 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 Shanghai Yanpu i.e., Shanghai Yanpu and Citic Guoan go up and down completely randomly.
Pair Corralation between Shanghai Yanpu and Citic Guoan
Assuming the 90 days trading horizon Shanghai Yanpu Metal is expected to generate 1.11 times more return on investment than Citic Guoan. However, Shanghai Yanpu is 1.11 times more volatile than Citic Guoan Wine. It trades about 0.05 of its potential returns per unit of risk. Citic Guoan Wine is currently generating about -0.01 per unit of risk. If you would invest 2,656 in Shanghai Yanpu Metal on August 31, 2024 and sell it today you would earn a total of 1,382 from holding Shanghai Yanpu Metal or generate 52.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Yanpu Metal vs. Citic Guoan Wine
Performance |
| Timeline |
| Shanghai Yanpu Metal |
| Citic Guoan Wine |
Shanghai Yanpu and Citic Guoan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Yanpu and Citic Guoan
The main advantage of trading using opposite Shanghai Yanpu and Citic Guoan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Yanpu 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 Yanpu vs. China State Construction | Shanghai Yanpu vs. China Merchants Shekou | Shanghai Yanpu vs. Huafa Industrial Co | Shanghai Yanpu vs. China International Capital |
| Citic Guoan vs. Shuhua Sports Co | Citic Guoan vs. Everdisplay Optronics Shanghai | Citic Guoan vs. Xiandai Investment Co | Citic Guoan vs. Jiangsu Financial Leasing |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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