Correlation Between CITIC DAMENG and CITIC RESHLDGS

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

Diversification Opportunities for CITIC DAMENG and CITIC RESHLDGS

0.0

Correlation Coefficient

CITIC DAMENG  CITIC RESHLDGS

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 RESHLDGS HD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC RESHLDGS HD 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 RESHLDGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC RESHLDGS HD has no effect on the direction of CITIC DAMENG i.e., CITIC DAMENG and CITIC RESHLDGS go up and down completely randomly.

Pair Corralation between CITIC DAMENG and CITIC RESHLDGS

If you would invest  3.70  in CITIC RESHLDGS HD on December 20, 2024 and sell it today you would earn a total of  0.15  from holding CITIC RESHLDGS HD or generate 4.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

CITIC DAMENG  vs.  CITIC RESHLDGS HD

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 current stock price tumult, may contribute to shorter-term losses for the shareholders.

CITIC RESHLDGS HD

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CITIC RESHLDGS HD are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, CITIC RESHLDGS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CITIC DAMENG and CITIC RESHLDGS

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

The idea behind CITIC DAMENG and CITIC RESHLDGS HD 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.