Correlation Between Citic Offshore and G Bits

Can any of the company-specific risk be diversified away by investing in both Citic Offshore and G Bits at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Citic Offshore and G Bits into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citic Offshore Helicopter and G bits Network Technology, you can compare the effects of market volatilities on Citic Offshore and G Bits 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 Citic Offshore with a short position of G Bits. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Offshore and G Bits.

Diversification Opportunities for Citic Offshore and G Bits

0.01

Correlation Coefficient

Citic Offshore  G Bits

Significant diversification

The 3 months correlation between Citic and 603444 is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Citic Offshore Helicopter and G bits Network Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G bits Network and Citic Offshore 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 Citic Offshore Helicopter are associated (or correlated) with G Bits. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G bits Network has no effect on the direction of Citic Offshore i.e., Citic Offshore and G Bits go up and down completely randomly.

Pair Corralation between Citic Offshore and G Bits

Assuming the 90 days trading horizon Citic Offshore Helicopter is expected to generate 2.02 times more return on investment than G Bits. However, Citic Offshore is 2.02 times more volatile than G bits Network Technology. It trades about 0.03 of its potential returns per unit of risk. G bits Network Technology is currently generating about -0.01 per unit of risk. If you would invest  2,316  in Citic Offshore Helicopter on October 26, 2024 and sell it today you would earn a total of  58.00  from holding Citic Offshore Helicopter or generate 2.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Citic Offshore Helicopter  vs.  G bits Network Technology

Citic Offshore Helicopter

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citic Offshore Helicopter are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Citic Offshore may actually be approaching a critical reversion point that can send shares even higher in February 2025.

G bits Network

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days G bits Network Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, G Bits is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citic Offshore and G Bits

The main advantage of trading using opposite Citic Offshore and G Bits positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Offshore position performs unexpectedly, G Bits 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 G Bits will offset losses from the drop in G Bits' long position.

The idea behind Citic Offshore Helicopter and G bits Network Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.