Correlation Between China Citic and Yunnan Chuangxin
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By analyzing existing cross correlation between China Citic Bank and Yunnan Chuangxin New, you can compare the effects of market volatilities on China Citic and Yunnan Chuangxin 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 Citic with a short position of Yunnan Chuangxin. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Citic and Yunnan Chuangxin.
Diversification Opportunities for China Citic and Yunnan Chuangxin
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Yunnan is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding China Citic Bank and Yunnan Chuangxin New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yunnan Chuangxin New and China Citic 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 Citic Bank are associated (or correlated) with Yunnan Chuangxin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yunnan Chuangxin New has no effect on the direction of China Citic i.e., China Citic and Yunnan Chuangxin go up and down completely randomly.
Pair Corralation between China Citic and Yunnan Chuangxin
Assuming the 90 days trading horizon China Citic Bank is expected to generate 0.75 times more return on investment than Yunnan Chuangxin. However, China Citic Bank is 1.33 times less risky than Yunnan Chuangxin. It trades about 0.15 of its potential returns per unit of risk. Yunnan Chuangxin New is currently generating about -0.41 per unit of risk. If you would invest 663.00 in China Citic Bank on September 26, 2024 and sell it today you would earn a total of 32.00 from holding China Citic Bank or generate 4.83% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
China Citic Bank vs. Yunnan Chuangxin New
Performance |
Timeline |
China Citic Bank |
Yunnan Chuangxin New |
China Citic and Yunnan Chuangxin Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Citic and Yunnan Chuangxin
The main advantage of trading using opposite China Citic and Yunnan Chuangxin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Citic position performs unexpectedly, Yunnan Chuangxin 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 Yunnan Chuangxin will offset losses from the drop in Yunnan Chuangxin's long position.China Citic vs. Kweichow Moutai Co | China Citic vs. Contemporary Amperex Technology | China Citic vs. G bits Network Technology | China Citic vs. BYD Co Ltd |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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