Correlation Between China Citic and JiShi Media

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

By analyzing existing cross correlation between China Citic Bank and JiShi Media Co, you can compare the effects of market volatilities on China Citic and JiShi Media 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 China Citic with a short position of JiShi Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Citic and JiShi Media.

Diversification Opportunities for China Citic and JiShi Media

0.2

Correlation Coefficient

China Citic  JiShi Media

Modest diversification

The 3 months correlation between China and JiShi is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding China Citic Bank and JiShi Media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JiShi Media and China Citic 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 China Citic Bank are associated (or correlated) with JiShi Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JiShi Media has no effect on the direction of China Citic i.e., China Citic and JiShi Media go up and down completely randomly.

Pair Corralation between China Citic and JiShi Media

Assuming the 90 days trading horizon China Citic Bank is expected to generate 0.44 times more return on investment than JiShi Media. However, China Citic Bank is 2.27 times less risky than JiShi Media. It trades about 0.28 of its potential returns per unit of risk. JiShi Media Co is currently generating about -0.12 per unit of risk. If you would invest  647.00  in China Citic Bank on December 10, 2024 and sell it today you would earn a total of  53.00  from holding China Citic Bank or generate 8.19% return on investment over 90 days.

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

China Citic Bank  vs.  JiShi Media Co

China Citic Bank

Risk-Adjusted Performance

Very Weak

Over the last 90 days China Citic Bank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, China Citic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

JiShi Media

Risk-Adjusted Performance

Very Weak

Over the last 90 days JiShi Media Co 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 China Citic and JiShi Media

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

The idea behind China Citic Bank and JiShi Media 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.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.