Correlation Between CITIC Securities and Grandblue Environment

Can any of the company-specific risk be diversified away by investing in both CITIC Securities and Grandblue Environment 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 Grandblue Environment 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 Grandblue Environment Co, you can compare the effects of market volatilities on CITIC Securities and Grandblue Environment 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 Grandblue Environment. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC Securities and Grandblue Environment.

Diversification Opportunities for CITIC Securities and Grandblue Environment

0.76

Correlation Coefficient

CITIC Securities  Grandblue Environment

Poor diversification

The 3 months correlation between CITIC and Grandblue is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Securities Co and Grandblue Environment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grandblue Environment 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 Grandblue Environment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grandblue Environment has no effect on the direction of CITIC Securities i.e., CITIC Securities and Grandblue Environment go up and down completely randomly.

Pair Corralation between CITIC Securities and Grandblue Environment

Assuming the 90 days trading horizon CITIC Securities Co is expected to generate 1.73 times more return on investment than Grandblue Environment. However, CITIC Securities is 1.73 times more volatile than Grandblue Environment Co. It trades about 0.16 of its potential returns per unit of risk. Grandblue Environment Co is currently generating about 0.07 per unit of risk. If you would invest  1,842  in CITIC Securities Co on September 20, 2024 and sell it today you would earn a total of  1,187  from holding CITIC Securities Co or generate 64.44% return on investment over 90 days.

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

CITIC Securities Co  vs.  Grandblue Environment Co

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.

Grandblue Environment

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Grandblue Environment Co are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Grandblue Environment sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CITIC Securities and Grandblue Environment

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

The idea behind CITIC Securities Co and Grandblue Environment Co 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.