Correlation Between CITIC DAMENG and CITIC (CPFSG)

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

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

Diversification Opportunities for CITIC DAMENG and CITIC (CPFSG)

0.0

Correlation Coefficient

CITIC DAMENG  CITIC (CPFSG)

Pay attention - limited upside

The 3 months correlation between CITIC and CITIC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CITIC DAMENG and CITIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC (CPFSG) and CITIC DAMENG 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 DAMENG are associated (or correlated) with CITIC (CPFSG). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC (CPFSG) has no effect on the direction of CITIC DAMENG i.e., CITIC DAMENG and CITIC (CPFSG) go up and down completely randomly.

Pair Corralation between CITIC DAMENG and CITIC (CPFSG)

If you would invest  106.00  in CITIC on December 20, 2024 and sell it today you would earn a total of  9.00  from holding CITIC or generate 8.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.67%
Values	Daily Returns

CITIC DAMENG  vs.  CITIC

CITIC DAMENG

Risk-Adjusted Performance

Very Weak

Over the last 90 days CITIC DAMENG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, CITIC DAMENG is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

CITIC (CPFSG)

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CITIC are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, CITIC (CPFSG) may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with CITIC DAMENG and CITIC (CPFSG)

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

The idea behind CITIC DAMENG and CITIC 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.