Correlation Between AMG Advanced and CITIC Resources

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

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

Diversification Opportunities for AMG Advanced and CITIC Resources

-0.25

Correlation Coefficient

AMG Advanced  CITIC Resources

Very good diversification

The 3 months correlation between AMG and CITIC is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and CITIC Resources Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC Resources Holdings and AMG Advanced 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 AMG Advanced Metallurgical are associated (or correlated) with CITIC Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC Resources Holdings has no effect on the direction of AMG Advanced i.e., AMG Advanced and CITIC Resources go up and down completely randomly.

Pair Corralation between AMG Advanced and CITIC Resources

If you would invest  8.00  in CITIC Resources Holdings on September 3, 2024 and sell it today you would earn a total of  0.00  from holding CITIC Resources Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

AMG Advanced Metallurgical  vs.  CITIC Resources Holdings

AMG Advanced Metallu

Risk-Adjusted Performance

0 of 100

Very Weak

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

CITIC Resources Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with AMG Advanced and CITIC Resources

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

The idea behind AMG Advanced Metallurgical and CITIC Resources Holdings 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.