Correlation Between CICC Fund and Sichuan Hebang

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

Diversification Opportunities for CICC Fund and Sichuan Hebang

-0.58

Correlation Coefficient

CICC Fund  Sichuan Hebang

Excellent diversification

The 3 months correlation between CICC and Sichuan is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding CICC Fund Management and Sichuan Hebang Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Hebang Biote 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 Sichuan Hebang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Hebang Biote has no effect on the direction of CICC Fund i.e., CICC Fund and Sichuan Hebang go up and down completely randomly.

Pair Corralation between CICC Fund and Sichuan Hebang

Assuming the 90 days trading horizon CICC Fund Management is expected to generate 0.65 times more return on investment than Sichuan Hebang. However, CICC Fund Management is 1.55 times less risky than Sichuan Hebang. It trades about 0.2 of its potential returns per unit of risk. Sichuan Hebang Biotechnology is currently generating about -0.12 per unit of risk. If you would invest  327.00  in CICC Fund Management on December 2, 2024 and sell it today you would earn a total of  48.00  from holding CICC Fund Management or generate 14.68% return on investment over 90 days.

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

CICC Fund Management  vs.  Sichuan Hebang Biotechnology

CICC Fund Management

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CICC Fund Management are ranked lower than 15 (%) 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.

Sichuan Hebang Biote

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sichuan Hebang Biotechnology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with CICC Fund and Sichuan Hebang

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

The idea behind CICC Fund Management and Sichuan Hebang Biotechnology 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.