Correlation Between Cardano and CITIC Securities

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

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

Diversification Opportunities for Cardano and CITIC Securities

0.0

Correlation Coefficient

Cardano  CITIC Securities

Pay attention - limited upside

The 3 months correlation between Cardano and CITIC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cardano and CITIC Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC Securities and Cardano 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 Cardano are associated (or correlated) with CITIC Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC Securities has no effect on the direction of Cardano i.e., Cardano and CITIC Securities go up and down completely randomly.

Pair Corralation between Cardano and CITIC Securities

If you would invest  33.00  in Cardano on October 24, 2024 and sell it today you would earn a total of  65.00  from holding Cardano or generate 196.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Cardano  vs.  CITIC Securities

Cardano

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cardano are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Cardano exhibited solid returns over the last few months and may actually be approaching a breakup point.

CITIC Securities

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days CITIC Securities has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CITIC Securities is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Cardano and CITIC Securities

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

The idea behind Cardano and CITIC Securities 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.