Correlation Between Zoje Resources and CICC Fund

Can any of the company-specific risk be diversified away by investing in both Zoje Resources and CICC Fund 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 Zoje Resources and CICC Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Zoje Resources Investment and CICC Fund Management, you can compare the effects of market volatilities on Zoje Resources and CICC Fund 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 Zoje Resources with a short position of CICC Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zoje Resources and CICC Fund.

Diversification Opportunities for Zoje Resources and CICC Fund

-0.74

Correlation Coefficient

Zoje Resources  CICC Fund

Pay attention - limited upside

The 3 months correlation between Zoje and CICC is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Zoje Resources Investment and CICC Fund Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CICC Fund Management and Zoje Resources 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 Zoje Resources Investment are associated (or correlated) with CICC Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CICC Fund Management has no effect on the direction of Zoje Resources i.e., Zoje Resources and CICC Fund go up and down completely randomly.

Pair Corralation between Zoje Resources and CICC Fund

Assuming the 90 days trading horizon Zoje Resources Investment is expected to under-perform the CICC Fund. In addition to that, Zoje Resources is 2.88 times more volatile than CICC Fund Management. It trades about -0.05 of its total potential returns per unit of risk. CICC Fund Management is currently generating about 0.09 per unit of volatility. If you would invest  369.00  in CICC Fund Management on December 22, 2024 and sell it today you would earn a total of  16.00  from holding CICC Fund Management or generate 4.34% return on investment over 90 days.

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

Zoje Resources Investment  vs.  CICC Fund Management

Zoje Resources Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zoje Resources Investment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

CICC Fund Management

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CICC Fund Management are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, CICC Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Zoje Resources and CICC Fund

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

The idea behind Zoje Resources Investment and CICC Fund Management 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.