Correlation Between Jiangsu Xinri and CITIC Metal

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

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

Diversification Opportunities for Jiangsu Xinri and CITIC Metal

0.33

Correlation Coefficient

Jiangsu Xinri  CITIC Metal

Weak diversification

The 3 months correlation between Jiangsu and CITIC is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Xinri E Vehicle and CITIC Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC Metal and Jiangsu Xinri 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 Jiangsu Xinri E Vehicle are associated (or correlated) with CITIC Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC Metal has no effect on the direction of Jiangsu Xinri i.e., Jiangsu Xinri and CITIC Metal go up and down completely randomly.

Pair Corralation between Jiangsu Xinri and CITIC Metal

Assuming the 90 days trading horizon Jiangsu Xinri E Vehicle is expected to generate 1.67 times more return on investment than CITIC Metal. However, Jiangsu Xinri is 1.67 times more volatile than CITIC Metal Co. It trades about -0.05 of its potential returns per unit of risk. CITIC Metal Co is currently generating about -0.11 per unit of risk. If you would invest  1,111  in Jiangsu Xinri E Vehicle on October 10, 2024 and sell it today you would lose (97.00) from holding Jiangsu Xinri E Vehicle or give up 8.73% of portfolio value over 90 days.

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

Jiangsu Xinri E Vehicle  vs.  CITIC Metal Co

Jiangsu Xinri E

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jiangsu Xinri E Vehicle has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

CITIC Metal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CITIC Metal Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Jiangsu Xinri and CITIC Metal

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

The idea behind Jiangsu Xinri E Vehicle and CITIC Metal 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.