Correlation Between Hubei Huaqiang and CITIC Guoan
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By analyzing existing cross correlation between Hubei Huaqiang High Tech and CITIC Guoan Information, you can compare the effects of market volatilities on Hubei Huaqiang 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 Hubei Huaqiang with a short position of CITIC Guoan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Huaqiang and CITIC Guoan.
Diversification Opportunities for Hubei Huaqiang and CITIC Guoan
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hubei and CITIC is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Huaqiang High Tech and CITIC Guoan Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC Guoan Information and Hubei Huaqiang 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 Hubei Huaqiang High Tech 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 Information has no effect on the direction of Hubei Huaqiang i.e., Hubei Huaqiang and CITIC Guoan go up and down completely randomly.
Pair Corralation between Hubei Huaqiang and CITIC Guoan
Assuming the 90 days trading horizon Hubei Huaqiang is expected to generate 1.18 times less return on investment than CITIC Guoan. But when comparing it to its historical volatility, Hubei Huaqiang High Tech is 1.68 times less risky than CITIC Guoan. It trades about 0.09 of its potential returns per unit of risk. CITIC Guoan Information is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 339.00 in CITIC Guoan Information on September 3, 2024 and sell it today you would earn a total of 12.00 from holding CITIC Guoan Information or generate 3.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubei Huaqiang High Tech vs. CITIC Guoan Information
Performance |
| Timeline |
| Hubei Huaqiang High |
| CITIC Guoan Information |
Hubei Huaqiang and CITIC Guoan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Huaqiang and CITIC Guoan
The main advantage of trading using opposite Hubei Huaqiang and CITIC Guoan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Huaqiang 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.| Hubei Huaqiang vs. Xinjiang Communications Construction | Hubei Huaqiang vs. Zhongtong Guomai Communication | Hubei Huaqiang vs. Zhejiang Publishing Media | Hubei Huaqiang vs. Northern United Publishing |
| CITIC Guoan vs. Gansu Jiu Steel | CITIC Guoan vs. Ming Yang Smart | CITIC Guoan vs. Aba Chemicals Corp | CITIC Guoan vs. Loctek Ergonomic Technology |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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