Open-source strategy: The conflict "second derivative" has emerged. The opportunity for left-side layout is now visible!

When it comes to stock trading, just look at Golden Kirin’s analyst reports—authoritative, professional, timely, comprehensive—helping you uncover high-potential theme opportunities!

Source: Open Source Securities

Report Summary

● The next signal—volatility convergence

In our 3.2 report 《The biggest expectation gap in the U.S.-Iran conflict—Iran’s duration and the Strait of Hormuz》, we clearly stated that the market may be overly optimistic about the rapid resolution of the U.S.-Iran conflict: “the duration of the conflict and the Strait of Hormuz may be the more prominent expectation gaps currently in the U.S.-Iran conflict.”

Whether it is the expectation gap in the duration of the conflict or the Strait of Hormuz, the most direct impact lies in crude oil prices. Crude oil prices and their supply—through a further long chain—affect all kinds of global factors. Therefore, crude oil prices have become the core observation point for current trends in global asset prices. Since the U.S.-Iran conflict began, crude oil prices have moved in the opposite direction from other major asset price trends, showing the rare phenomenon of “crude oil surging while everything else collectively falls.”

Although crude oil prices are rising quickly, volatility is very high. As for how it affects different categories of assets—long term or short term, beneficial or harmful—the most important next signal does not actually come from where the “crude oil price” ultimately settles, but from when the crude oil price volatility converges. Only then can its impact on various assets become more certain and take shape. This is the most core right-side signal for investors’ decision-making.

(1) How to respond during high-volatility periods: In our 3.2 report 《The biggest expectation gap in the U.S.-Iran conflict—Iran’s duration and the Strait of Hormuz》, we clearly put forward the investment strategy to address expectation gaps after the conflict: stay true to our principles while acting unusually; focus on “three-tier” allocations—

① “Certain” assets: shipping (oil transport / dry bulk), gold, energy upstream (oil, coal, coal chemical industry), chemical products (methanol, urea);

② “Trend” assets to respond based on subsequent developments: defense and military industry (defense AI, drones, missile defense), cybersecurity, export manufacturing substitution;

③ “Non-consensus” allocations from a macro perspective: agriculture and forestry, animal husbandry, and fisheries (hedging inflation risk), volatility strategies (not easily shorting volatility).

(2) How to respond when volatility falls: the medium- to long-term framework after volatility reverts—

① AI technology: ΔG + profit redistribution: power capital (power equipment), compute capital (compute power, storage, semiconductors, robots), platform applications (AI4S);

② In a value-hike/surge cycle context: base metals (energy metals, minor metals), chemical and petrochemical products, insurance, building materials;

③ A major theme year in 2026: AI+ (AI4S), embodied intelligence, nuclear fusion energy, quantum technology, brain-computer interfaces;

④ Improved allocation value for high dividends in 2026: consider high dividends with ΔG: coal, non-bank financials, media, petrochemicals, transportation & logistics.

02

Criteria for judging right-side signals: two volatility measures—OVX and VIX

In market turmoil triggered by geopolitical conflicts, stepping out of a single “event-driven” logic and shifting to a quantitative volatility framework and cross-asset indicators is the core of how institutional investors make defensive allocations or left-side setups. At present, the market is suffering from disturbances caused by geopolitical news. Compared with positive rumors, the market appears to react faster and more aggressively to negative rumors, showing a certain degree of “asymmetry” and “irrationality,” and also reflecting that when geopolitical turmoil hits, the market focuses more on potential risks. When there is too much noise in the environment and the market, the complexity of research and investment work increases. All of this boils down to the market lacking a single core, quantifiable “main handle” that is recognized by the market.

The current suggestion about “U.S.-Iran uncertainty” should be validated through “range/volatility contraction,” rather than “event resolution.” Since the conflict began, the U.S.-Iran situation has shown characteristics of dynamism and volatility that exceed market expectations. There does not seem to be a unified node at which to judge whether the conflict will escalate; similarly, it is also difficult to judge that the conflict ends based on the appearance of a particular event node. Therefore, for investors seeking an entry timing, if they judge the geopolitical turning point with “event resolution,” there is a risk of missing the best entry window. Just as the market’s pricing and intensity of this conflict have exceeded market expectations, looking forward, the actual turning points of the geopolitical situation are likely to similarly be beyond what the market recognizes.

To effectively observe volatility, we introduce two volatility indicators: OVX and VIX. OVX, the crude oil ETF volatility index, measures market expectations for crude oil volatility over the next one month and represents energy supply risk. VIX, the Chicago Options Exchange volatility index—commonly known as the fear index—measures market expectations for S&P 500 volatility over the next one month and represents recession risk. Currently, if the market is worried about whether energy supply risk will transmit into the economy and lead to broader systemic risks like the economy, we can measure and grasp it by looking at the trends of OVX and VIX.

When OVX rises quickly while VIX reacts with a relative lag, it indicates that risks are still concentrated on the energy end and have not fully transmitted into global macro credit risk or earnings expectations. Once both synchronize and resonate upward, it often means that geopolitical risk has already triggered a liquidity crisis or global recession expectations. Current risks are still concentrated in energy supply risk and have not fully transmitted into global macro credit risk or earnings expectations.

Looking back at the past, there have been three periods when OVX significantly exceeded VIX—energy supply risk surpassing recession risk—and all occurred during times when energy prices fell sharply. From 2007 to now, the periods when OVX significantly exceeded VIX include 2014.11-2015.2, 2015.12-2016.2, and 2020.1-2020.4, all of which were during major declines in WTI crude oil prices. Compared with historical VIX readings, the current reading is below the VIX level during the mid-April 2025 U.S.-China trade conflict.

Before right-side signals become clearly visible, we provide a typical response framework 【Volatility Four Quadrants】：

Given the highly uncertain geopolitical situation and the current market environment, “volatility” and “fragility” are what make investing difficult. We propose that volatility be the core analytical framework. We suggest validating entry timing through “volatility/range contraction,” rather than “event resolution.” Focus on OVX and VIX: the two represent energy supply risk and recession risk faced by the market, respectively. In terms of investment advice, focus on response; adopt a “hedging” mindset and grasp the “Volatility Four Quadrants”：

【Volatility Four Quadrants】—industry allocation suggestions：

(1) OVX high + VIX oscillating: The market is in a localized energy crisis. For allocation, recommend overweighting traditional energy / energy substitutes, and prioritize directions with strong price transmission capability. Suggested areas include power equipment and coal and coal chemical industry;

(2) OVX elevated + VIX rising quickly: Systemic recession/liquidity risk induced by geopolitics—defense comes first;

(3) OVX peaks and then pulls back + VIX oscillates downward: the crude oil volatility term structure begins shifting from backwardation to contango. The crisis has passed—rotate to technology growth. Recommend compute power, semiconductors, Hong Kong-listed internet, robots, storage, price-raising beneficiaries, AI4S, and similar themes; theme investing moves into a big year;

(4) OVX declines + VIX spikes abnormally: Geopolitics ends, but the impact of high oil prices on the economy remains—rotate to high-dividend / low-volatility.

03

The “second-order” changes in the conflict are already showing; left-side opportunities are available, but right-side confirmation is not yet there

(1) The latest change is that it’s not only that both conflict parties have started releasing signals of “leaving room for a way out,” but that outside the conflict, countries have also taken more proactive actions:

① The current statements and engagement between the two conflict parties are closer to a “political game” stage of “using force to promote negotiations”;

② The Strait of Hormuz has also seen marginal changes in flow;

③ In recent times, the international community has put more emphasis on diplomatic pressure and coordination across economic and political dimensions to help restore navigation through the Strait of Hormuz.

On April 2, the UK hosted an online ministerial meeting to discuss ways to restore passage through the strait. Notably, the U.S. did not participate. Participating countries included more than 40 countries such as France, Germany, Italy, Canada, and the UAE. This reflects that major European powers worry that extreme pressure from the U.S. (the Trump administration) could lead to the strait being permanently closed. They are attempting to engage with Iran directly through “diplomatic and political means,” aiming for “a ceasefire in exchange for restored navigation.”

As for China: on March 31, China and Pakistan jointly released a “five-point initiative.” It directly stated “immediately stop the fighting and stop the war,” and also required “restoring normal navigation of the strait as soon as possible.” On April 2, the Ministry of Foreign Affairs also issued back-to-back statements, emphasizing that “only by stopping the fighting and stopping the war can international shipping routes be fundamentally protected and kept safe and open,” and saying that “achieving a ceasefire and stopping the war and restoring peace and stability in the Strait of Hormuz and nearby waters as soon as possible is a common aspiration of the international community.” This is very clear public messaging—and with marginal escalation that keeps increasing.

Pakistan is one of the most active mediators in this round. It has moved from general calls to hosting multi-country foreign minister meetings and working to promote concrete plans. On March 29, Pakistan held a foreign ministers’ meeting in Islamabad with Turkey, Egypt, and Saudi Arabia. Reuters explicitly wrote that they discussed “possible ways to bring an early and permanent end to the war,” and made “reopen the Strait of Hormuz” a focus of initial discussion. On March 31, Pakistan also jointly proposed the “five-point initiative” with China, while also requiring a ceasefire and the restoration of safe passage.

② At the same time, the U.S. has recently maintained military high pressure while continuing to release signals of communication and potential arrangements. Trump said the U.S. could end hostilities against Iran within “two to three weeks,” and even ruled out pushing the conflict to wind down before a formal agreement. On the other hand, when Trump was interviewed by NBC News by phone, he said that the downing of U.S. military aircraft would not affect negotiations with Iran. Overall, Trump’s statements have already shifted into “hard with some soft.”

② The Strait of Hormuz has also seen marginal flow changes: over the past week, there have been signs of marginal repair in near-term traffic through the Strait of Hormuz; ships including those from Oman, Japan, and France, as well as tankers carrying Iraqi crude oil, have already passed. Local time on April 4: according to a Reuters report citing Iran’s Tasnim, Iran has allowed ships carrying basic living supplies to travel through the Strait of Hormuz to its ports.

(2) This means that the “second-order” unfolding of the war has begun to change.

In the early stage, the market was pricing in the worst scenario: “the conflict lasting longer + spillover escalating + supply disruptions deepening.” Now, even though on the surface both sides of the conflict are still carrying out attacks, both sides have reserved room to de-escalate. In other words, even though the war itself has not ended, the phase of “getting worse and worse” may be approaching its end.

(3) Of course, this is still not right-side confirmation.

Because key hard constraints—like the Strait of Hormuz, repairs to energy supply, and formal negotiation mechanisms—are not yet fully in place, the market has not yet returned to a state of “nothing happening.” Right-side confirmation requires further pullback in crude oil volatility (OVX).

(4) But in terms of allocation, left-side signals have already emerged, so you can be somewhat more proactive than in the earlier period. Still, we need to emphasize: left-side signals are an important timing point in a relative return game, but right-side signals are the best timing for absolute return entries.

In the short term, the tech categories that were most damaged earlier often benefit the most. In the long term, what truly deserves attention is still ΔG growth. If oil prices and related volatility continue to fall after this, market risk appetite is expected to be able to further recover, and growth is likely to remain one of the directions with the greatest recovery elasticity.

04

Investment outlook: the timing for left-side positioning is here—seize opportunities with ΔG tech + high dividends

Given the highly uncertain geopolitical situation and the current market environment, “volatility” and “fragility” are what make investing difficult right now. We propose volatility as the core of the analytical framework and recommend validating entry timing through “volatility/range contraction,” rather than “event resolution.” Focus on OVX and VIX: both represent the energy facing the market—

For the next actions, we believe: the conflict is not over, but the worst pricing phase may be behind us. The left side can start attempting offensive positioning, but it should not be overly aggressive, while tech growth remains the most worth focusing on.

Allocation approach:

(1) Growth is still the strongest main theme in this cycle, but the investment thinking needs to change: ΔG + profit redistribution. Key areas to focus on: power capital (power equipment, energy metals), compute capital (storage, semiconductors, robots, liquid cooling), platform applications (Hong Kong-listed internet), innovative drugs;

(2) We emphasize that high dividends in 2026 are better than in 2025. Focus on high dividends that incorporate ΔG: coal, insurance, media, petrochemicals, transportation & logistics;

(3) “Option”-like items after a potential bottoming in real estate prices: optional consumption and service consumption recovery driven by stabilization of balance sheets (high-end commercial properties, outdoor sports, tourism, hotels, catering, etc.).

05

Risk warnings

Accelerated recovery process due to macro policy changes that exceed expectations.

Risk of worsening geopolitical conditions.

Risk of changes in industrial policies.

大量资讯、精准解读，尽在新浪财经APP

责任编辑：郭栩彤