Correlation Between Algorand and CITIC Securities

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

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

Diversification Opportunities for Algorand and CITIC Securities

-0.52

Correlation Coefficient

Algorand  CITIC Securities

Excellent diversification

The 3 months correlation between Algorand and CITIC is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Algorand and CITIC Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC Securities and Algorand 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 Algorand 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 Algorand i.e., Algorand and CITIC Securities go up and down completely randomly.

Pair Corralation between Algorand and CITIC Securities

Assuming the 90 days trading horizon Algorand is expected to under-perform the CITIC Securities. In addition to that, Algorand is 1.91 times more volatile than CITIC Securities. It trades about -0.15 of its total potential returns per unit of risk. CITIC Securities is currently generating about 0.02 per unit of volatility. If you would invest  260.00  in CITIC Securities on December 22, 2024 and sell it today you would earn a total of  2.00  from holding CITIC Securities or generate 0.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.75%
Values	Daily Returns

Algorand  vs.  CITIC Securities

Algorand

Risk-Adjusted Performance

Very Weak

Over the last 90 days Algorand has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for Algorand shareholders.

CITIC Securities

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CITIC Securities are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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 Algorand and CITIC Securities

The main advantage of trading using opposite Algorand and CITIC Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algorand 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 Algorand 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.