Correlation Between China Asset and Citic Guoan
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By analyzing existing cross correlation between China Asset Management and Citic Guoan Wine, you can compare the effects of market volatilities on China Asset 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 China Asset with a short position of Citic Guoan. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Asset and Citic Guoan.
Diversification Opportunities for China Asset and Citic Guoan
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and Citic is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding China Asset Management 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 China Asset 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 China Asset Management 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 China Asset i.e., China Asset and Citic Guoan go up and down completely randomly.
Pair Corralation between China Asset and Citic Guoan
Assuming the 90 days trading horizon China Asset is expected to generate 1.17 times less return on investment than Citic Guoan. But when comparing it to its historical volatility, China Asset Management is 2.94 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 0.05 of returns per unit of risk over similar time horizon. If you would invest 514.00 in Citic Guoan Wine on September 26, 2024 and sell it today you would earn a total of 30.00 from holding Citic Guoan Wine or generate 5.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
China Asset Management vs. Citic Guoan Wine
Performance |
Timeline |
China Asset Management |
Citic Guoan Wine |
China Asset and Citic Guoan Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Asset and Citic Guoan
The main advantage of trading using opposite China Asset and Citic Guoan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Asset 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.China Asset vs. Industrial and Commercial | China Asset vs. Kweichow Moutai Co | China Asset vs. Agricultural Bank of | China Asset vs. China Mobile Limited |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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