Correlation Between AWILCO DRILLING and CITIC Securities

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

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

Diversification Opportunities for AWILCO DRILLING and CITIC Securities

-0.08

Correlation Coefficient

AWILCO DRILLING  CITIC Securities

Good diversification

The 3 months correlation between AWILCO and CITIC is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding AWILCO DRILLING PLC and CITIC Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC Securities and AWILCO DRILLING 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 AWILCO DRILLING PLC 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 AWILCO DRILLING i.e., AWILCO DRILLING and CITIC Securities go up and down completely randomly.

Pair Corralation between AWILCO DRILLING and CITIC Securities

Assuming the 90 days trading horizon AWILCO DRILLING PLC is expected to generate 1.69 times more return on investment than CITIC Securities. However, AWILCO DRILLING is 1.69 times more volatile than CITIC Securities. It trades about 0.02 of its potential returns per unit of risk. CITIC Securities is currently generating about -0.14 per unit of risk. If you would invest  187.00  in AWILCO DRILLING PLC on October 10, 2024 and sell it today you would lose (1.00) from holding AWILCO DRILLING PLC or give up 0.53% of portfolio value over 90 days.

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

AWILCO DRILLING PLC  vs.  CITIC Securities

AWILCO DRILLING PLC

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AWILCO DRILLING PLC are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, AWILCO DRILLING reported solid returns over the last few months and may actually be approaching a breakup point.

CITIC Securities

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CITIC Securities are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CITIC Securities reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AWILCO DRILLING and CITIC Securities

The main advantage of trading using opposite AWILCO DRILLING and CITIC Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AWILCO DRILLING 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 AWILCO DRILLING PLC and CITIC Securities 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.