Correlation Between China Molybdenum and CICC Fund

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

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

Diversification Opportunities for China Molybdenum and CICC Fund

-0.79

Correlation Coefficient

China Molybdenum  CICC Fund

Pay attention - limited upside

The 3 months correlation between China and CICC is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding China Molybdenum Co and CICC Fund Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CICC Fund Management and China Molybdenum 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 Molybdenum Co are associated (or correlated) with CICC Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CICC Fund Management has no effect on the direction of China Molybdenum i.e., China Molybdenum and CICC Fund go up and down completely randomly.

Pair Corralation between China Molybdenum and CICC Fund

Assuming the 90 days trading horizon China Molybdenum Co is expected to generate 2.81 times more return on investment than CICC Fund. However, China Molybdenum is 2.81 times more volatile than CICC Fund Management. It trades about 0.04 of its potential returns per unit of risk. CICC Fund Management is currently generating about 0.08 per unit of risk. If you would invest  484.00  in China Molybdenum Co on October 3, 2024 and sell it today you would earn a total of  181.00  from holding China Molybdenum Co or generate 37.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.79%
Values	Daily Returns

China Molybdenum Co  vs.  CICC Fund Management

China Molybdenum

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days China Molybdenum 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

CICC Fund Management

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CICC Fund Management are ranked lower than 17 (%) 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.

Pair Trading with China Molybdenum and CICC Fund

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

The idea behind China Molybdenum Co and CICC Fund Management 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.