Correlation Between CICC Fund and AUPU Home

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

Diversification Opportunities for CICC Fund and AUPU Home

0.0

Correlation Coefficient

CICC Fund  AUPU Home

Pay attention - limited upside

The 3 months correlation between CICC and AUPU is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CICC Fund Management and AUPU Home Style in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUPU Home Style 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 AUPU Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUPU Home Style has no effect on the direction of CICC Fund i.e., CICC Fund and AUPU Home go up and down completely randomly.

Pair Corralation between CICC Fund and AUPU Home

Assuming the 90 days trading horizon CICC Fund Management is expected to generate 0.52 times more return on investment than AUPU Home. However, CICC Fund Management is 1.94 times less risky than AUPU Home. It trades about 0.32 of its potential returns per unit of risk. AUPU Home Style is currently generating about 0.02 per unit of risk. If you would invest  314.00  in CICC Fund Management on October 24, 2024 and sell it today you would earn a total of  77.00  from holding CICC Fund Management or generate 24.52% return on investment over 90 days.

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

CICC Fund Management  vs.  AUPU Home Style

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.

AUPU Home Style

Risk-Adjusted Performance

1 of 100

Weak

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

Pair Trading with CICC Fund and AUPU Home

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

The idea behind CICC Fund Management and AUPU Home Style 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.