Correlation Between Sinosteel Luonai and Citic Guoan
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By analyzing existing cross correlation between Sinosteel Luonai Materials and Citic Guoan Wine, you can compare the effects of market volatilities on Sinosteel Luonai 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 Sinosteel Luonai with a short position of Citic Guoan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinosteel Luonai and Citic Guoan.
Diversification Opportunities for Sinosteel Luonai and Citic Guoan
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sinosteel and Citic is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Sinosteel Luonai 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 Sinosteel Luonai 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 Sinosteel Luonai 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 Sinosteel Luonai i.e., Sinosteel Luonai and Citic Guoan go up and down completely randomly.
Pair Corralation between Sinosteel Luonai and Citic Guoan
Assuming the 90 days trading horizon Sinosteel Luonai Materials is expected to generate 0.89 times more return on investment than Citic Guoan. However, Sinosteel Luonai Materials is 1.13 times less risky than Citic Guoan. It trades about 0.04 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 408.00 in Sinosteel Luonai Materials on August 29, 2024 and sell it today you would earn a total of 6.00 from holding Sinosteel Luonai Materials or generate 1.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinosteel Luonai Materials vs. Citic Guoan Wine
Performance |
| Timeline |
| Sinosteel Luonai Mat |
| Citic Guoan Wine |
Sinosteel Luonai and Citic Guoan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinosteel Luonai and Citic Guoan
The main advantage of trading using opposite Sinosteel Luonai and Citic Guoan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinosteel Luonai 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.| Sinosteel Luonai vs. Zijin Mining Group | Sinosteel Luonai vs. Wanhua Chemical Group | Sinosteel Luonai vs. Baoshan Iron Steel | Sinosteel Luonai vs. Shandong Gold Mining |
| 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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