Correlation Between Holitech Technology and CITIC Securities

Can any of the company-specific risk be diversified away by investing in both Holitech Technology and CITIC Securities 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 Holitech Technology and CITIC Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Holitech Technology Co and CITIC Securities Co, you can compare the effects of market volatilities on Holitech Technology and CITIC Securities 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 Holitech Technology with a short position of CITIC Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holitech Technology and CITIC Securities.

Diversification Opportunities for Holitech Technology and CITIC Securities

0.63

Correlation Coefficient

Holitech Technology  CITIC Securities

Poor diversification

The 3 months correlation between Holitech and CITIC is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Holitech Technology Co and CITIC Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC Securities and Holitech Technology 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 Holitech Technology Co are associated (or correlated) with CITIC Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC Securities has no effect on the direction of Holitech Technology i.e., Holitech Technology and CITIC Securities go up and down completely randomly.

Pair Corralation between Holitech Technology and CITIC Securities

Assuming the 90 days trading horizon Holitech Technology Co is expected to under-perform the CITIC Securities. In addition to that, Holitech Technology is 1.86 times more volatile than CITIC Securities Co. It trades about 0.0 of its total potential returns per unit of risk. CITIC Securities Co is currently generating about 0.03 per unit of volatility. If you would invest  2,209  in CITIC Securities Co on October 23, 2024 and sell it today you would earn a total of  531.00  from holding CITIC Securities Co or generate 24.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.59%
Values	Daily Returns

Holitech Technology Co  vs.  CITIC Securities Co

Holitech Technology

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Holitech Technology Co are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Holitech Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

CITIC Securities

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Holitech Technology and CITIC Securities

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

The idea behind Holitech Technology Co and CITIC Securities Co 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.