Correlation Between SIASUN Robot and CITIC Metal

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

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

Diversification Opportunities for SIASUN Robot and CITIC Metal

0.65

Correlation Coefficient

SIASUN Robot  CITIC Metal

Poor diversification

The 3 months correlation between SIASUN and CITIC is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding SIASUN Robot Automation and CITIC Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC Metal and SIASUN Robot 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 SIASUN Robot Automation are associated (or correlated) with CITIC Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC Metal has no effect on the direction of SIASUN Robot i.e., SIASUN Robot and CITIC Metal go up and down completely randomly.

Pair Corralation between SIASUN Robot and CITIC Metal

Assuming the 90 days trading horizon SIASUN Robot Automation is expected to generate 4.43 times more return on investment than CITIC Metal. However, SIASUN Robot is 4.43 times more volatile than CITIC Metal Co. It trades about 0.12 of its potential returns per unit of risk. CITIC Metal Co is currently generating about -0.1 per unit of risk. If you would invest  1,885  in SIASUN Robot Automation on September 24, 2024 and sell it today you would earn a total of  184.00  from holding SIASUN Robot Automation or generate 9.76% return on investment over 90 days.

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

SIASUN Robot Automation  vs.  CITIC Metal Co

SIASUN Robot Automation

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SIASUN Robot Automation are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, SIASUN Robot sustained solid returns over the last few months and may actually be approaching a breakup point.

CITIC Metal

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CITIC Metal Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, CITIC Metal may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with SIASUN Robot and CITIC Metal

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

The idea behind SIASUN Robot Automation and CITIC Metal 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.