Correlation Between Porton Fine and CICC Fund

Can any of the company-specific risk be diversified away by investing in both Porton Fine and CICC Fund 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 Porton Fine and CICC Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Porton Fine Chemicals and CICC Fund Management, you can compare the effects of market volatilities on Porton Fine and CICC Fund 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 Porton Fine with a short position of CICC Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Porton Fine and CICC Fund.

Diversification Opportunities for Porton Fine and CICC Fund

-0.67

Correlation Coefficient

Porton Fine  CICC Fund

Excellent diversification

The 3 months correlation between Porton and CICC is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Porton Fine Chemicals and CICC Fund Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CICC Fund Management and Porton Fine 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 Porton Fine Chemicals are associated (or correlated) with CICC Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CICC Fund Management has no effect on the direction of Porton Fine i.e., Porton Fine and CICC Fund go up and down completely randomly.

Pair Corralation between Porton Fine and CICC Fund

Assuming the 90 days trading horizon Porton Fine is expected to generate 4.0 times less return on investment than CICC Fund. In addition to that, Porton Fine is 3.75 times more volatile than CICC Fund Management. It trades about 0.02 of its total potential returns per unit of risk. CICC Fund Management is currently generating about 0.32 per unit of volatility. If you would invest  314.00  in CICC Fund Management on October 23, 2024 and sell it today you would earn a total of  78.00  from holding CICC Fund Management or generate 24.84% return on investment over 90 days.

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

Porton Fine Chemicals  vs.  CICC Fund Management

Porton Fine Chemicals

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Porton Fine Chemicals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Porton Fine is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

CICC Fund Management

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CICC Fund Management are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, CICC Fund sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Porton Fine and CICC Fund

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

The idea behind Porton Fine Chemicals and CICC Fund Management 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.

Check out your portfolio center.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.