Correlation Between CITIC Securities and 37 Interactive

Can any of the company-specific risk be diversified away by investing in both CITIC Securities and 37 Interactive 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 CITIC Securities and 37 Interactive into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CITIC Securities Co and 37 Interactive Entertainment, you can compare the effects of market volatilities on CITIC Securities and 37 Interactive 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 CITIC Securities with a short position of 37 Interactive. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC Securities and 37 Interactive.

Diversification Opportunities for CITIC Securities and 37 Interactive

0.88

Correlation Coefficient

CITIC Securities  37 Interactive

Very poor diversification

The 3 months correlation between CITIC and 002555 is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Securities Co and 37 Interactive Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 37 Interactive Enter and CITIC Securities 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 CITIC Securities Co are associated (or correlated) with 37 Interactive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 37 Interactive Enter has no effect on the direction of CITIC Securities i.e., CITIC Securities and 37 Interactive go up and down completely randomly.

Pair Corralation between CITIC Securities and 37 Interactive

Assuming the 90 days trading horizon CITIC Securities is expected to generate 15.07 times less return on investment than 37 Interactive. But when comparing it to its historical volatility, CITIC Securities Co is 1.33 times less risky than 37 Interactive. It trades about 0.01 of its potential returns per unit of risk. 37 Interactive Entertainment is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,609  in 37 Interactive Entertainment on September 23, 2024 and sell it today you would earn a total of  61.00  from holding 37 Interactive Entertainment or generate 3.79% return on investment over 90 days.

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

CITIC Securities Co  vs.  37 Interactive Entertainment

CITIC Securities

Risk-Adjusted Performance

17 of 100

Solid

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

37 Interactive Enter

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in 37 Interactive Entertainment are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 37 Interactive sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CITIC Securities and 37 Interactive

The main advantage of trading using opposite CITIC Securities and 37 Interactive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIC Securities position performs unexpectedly, 37 Interactive 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 37 Interactive will offset losses from the drop in 37 Interactive's long position.

The idea behind CITIC Securities Co and 37 Interactive Entertainment 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.