Correlation Between Citic Offshore and Uxi Unicomp

Can any of the company-specific risk be diversified away by investing in both Citic Offshore and Uxi Unicomp 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 Uxi Unicomp 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 Uxi Unicomp Technology, you can compare the effects of market volatilities on Citic Offshore and Uxi Unicomp 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 Uxi Unicomp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Offshore and Uxi Unicomp.

Diversification Opportunities for Citic Offshore and Uxi Unicomp

0.32

Correlation Coefficient

Citic Offshore  Uxi Unicomp

Weak diversification

The 3 months correlation between Citic and Uxi is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Citic Offshore Helicopter and Uxi Unicomp Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uxi Unicomp Technology 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 Uxi Unicomp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uxi Unicomp Technology has no effect on the direction of Citic Offshore i.e., Citic Offshore and Uxi Unicomp go up and down completely randomly.

Pair Corralation between Citic Offshore and Uxi Unicomp

Assuming the 90 days trading horizon Citic Offshore Helicopter is expected to generate 1.02 times more return on investment than Uxi Unicomp. However, Citic Offshore is 1.02 times more volatile than Uxi Unicomp Technology. It trades about 0.08 of its potential returns per unit of risk. Uxi Unicomp Technology is currently generating about -0.07 per unit of risk. If you would invest  736.00  in Citic Offshore Helicopter on October 11, 2024 and sell it today you would earn a total of  1,510  from holding Citic Offshore Helicopter or generate 205.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.55%
Values	Daily Returns

Citic Offshore Helicopter  vs.  Uxi Unicomp Technology

Citic Offshore Helicopter

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Citic Offshore Helicopter are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Citic Offshore sustained solid returns over the last few months and may actually be approaching a breakup point.

Uxi Unicomp Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Uxi Unicomp Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Uxi Unicomp 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 Uxi Unicomp

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

The idea behind Citic Offshore Helicopter and Uxi Unicomp 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.