Correlation Between CiT and Taoping

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

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

Diversification Opportunities for CiT and Taoping

-0.49

Correlation Coefficient

CiT  Taoping

Very good diversification

The 3 months correlation between CiT and Taoping is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding CiT Inc and Taoping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taoping and CiT 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 CiT Inc are associated (or correlated) with Taoping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taoping has no effect on the direction of CiT i.e., CiT and Taoping go up and down completely randomly.

Pair Corralation between CiT and Taoping

Given the investment horizon of 90 days CiT Inc is expected to generate 0.39 times more return on investment than Taoping. However, CiT Inc is 2.55 times less risky than Taoping. It trades about 0.07 of its potential returns per unit of risk. Taoping is currently generating about 0.0 per unit of risk. If you would invest  666.00  in CiT Inc on November 19, 2024 and sell it today you would earn a total of  58.00  from holding CiT Inc or generate 8.71% return on investment over 90 days.

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

CiT Inc  vs.  Taoping

CiT Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CiT Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, CiT may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Taoping

Risk-Adjusted Performance

Very Weak

Over the last 90 days Taoping has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Taoping is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with CiT and Taoping

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

The idea behind CiT Inc and Taoping 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.