Correlation Between CITIC Securities and AECOM TECHNOLOGY

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

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

Diversification Opportunities for CITIC Securities and AECOM TECHNOLOGY

0.32

Correlation Coefficient

CITIC Securities  AECOM TECHNOLOGY

Weak diversification

The 3 months correlation between CITIC and AECOM is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Securities and AECOM TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AECOM TECHNOLOGY and CITIC Securities 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 CITIC Securities are associated (or correlated) with AECOM TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AECOM TECHNOLOGY has no effect on the direction of CITIC Securities i.e., CITIC Securities and AECOM TECHNOLOGY go up and down completely randomly.

Pair Corralation between CITIC Securities and AECOM TECHNOLOGY

Assuming the 90 days horizon CITIC Securities is expected to generate 4.66 times more return on investment than AECOM TECHNOLOGY. However, CITIC Securities is 4.66 times more volatile than AECOM TECHNOLOGY. It trades about 0.12 of its potential returns per unit of risk. AECOM TECHNOLOGY is currently generating about 0.07 per unit of risk. If you would invest  71.00  in CITIC Securities on October 12, 2024 and sell it today you would earn a total of  175.00  from holding CITIC Securities or generate 246.48% return on investment over 90 days.

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

CITIC Securities  vs.  AECOM TECHNOLOGY

CITIC Securities

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CITIC Securities are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, CITIC Securities reported solid returns over the last few months and may actually be approaching a breakup point.

AECOM TECHNOLOGY

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AECOM TECHNOLOGY are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, AECOM TECHNOLOGY may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with CITIC Securities and AECOM TECHNOLOGY

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

The idea behind CITIC Securities and AECOM TECHNOLOGY 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.