Correlation Between CITIC SECURITIES-H- and DICKS Sporting

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

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

Diversification Opportunities for CITIC SECURITIES-H- and DICKS Sporting

-0.32

Correlation Coefficient

CITIC SECURITIES-H-  DICKS Sporting

Very good diversification

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

Pair Corralation between CITIC SECURITIES-H- and DICKS Sporting

Assuming the 90 days trading horizon CITIC SECURITIES H is expected to generate 0.95 times more return on investment than DICKS Sporting. However, CITIC SECURITIES H is 1.05 times less risky than DICKS Sporting. It trades about -0.04 of its potential returns per unit of risk. DICKS Sporting Goods is currently generating about -0.28 per unit of risk. If you would invest  272.00  in CITIC SECURITIES H on December 11, 2024 and sell it today you would lose (6.00) from holding CITIC SECURITIES H or give up 2.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CITIC SECURITIES H   vs.  DICKS Sporting Goods

CITIC SECURITIES-H-

Risk-Adjusted Performance

Very Weak

Over the last 90 days CITIC SECURITIES H has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, CITIC SECURITIES-H- is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

DICKS Sporting Goods

Risk-Adjusted Performance

Very Weak

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

Pair Trading with CITIC SECURITIES-H- and DICKS Sporting

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

The idea behind CITIC SECURITIES H and DICKS Sporting Goods 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.