Correlation Between CICC Fund and Citic Offshore

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

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

Diversification Opportunities for CICC Fund and Citic Offshore

0.24

Correlation Coefficient

CICC Fund  Citic Offshore

Modest diversification

The 3 months correlation between CICC and Citic is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding CICC Fund Management and Citic Offshore Helicopter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citic Offshore Helicopter and CICC Fund 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 CICC Fund Management are associated (or correlated) with Citic Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citic Offshore Helicopter has no effect on the direction of CICC Fund i.e., CICC Fund and Citic Offshore go up and down completely randomly.

Pair Corralation between CICC Fund and Citic Offshore

Assuming the 90 days trading horizon CICC Fund is expected to generate 4.66 times less return on investment than Citic Offshore. But when comparing it to its historical volatility, CICC Fund Management is 4.32 times less risky than Citic Offshore. It trades about 0.08 of its potential returns per unit of risk. Citic Offshore Helicopter is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  774.00  in Citic Offshore Helicopter on October 5, 2024 and sell it today you would earn a total of  1,669  from holding Citic Offshore Helicopter or generate 215.63% return on investment over 90 days.

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

CICC Fund Management  vs.  Citic Offshore Helicopter

CICC Fund Management

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CICC Fund Management are ranked lower than 19 (%) 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.

Citic Offshore Helicopter

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Citic Offshore Helicopter are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Citic Offshore sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CICC Fund and Citic Offshore

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

The idea behind CICC Fund Management and Citic Offshore Helicopter 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.