Correlation Between CITIC and CITIC DAMENG

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

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

Diversification Opportunities for CITIC and CITIC DAMENG

0.0

Correlation Coefficient

CITIC  CITIC DAMENG

Pay attention - limited upside

The 3 months correlation between CITIC and CITIC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Limited and CITIC DAMENG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC DAMENG and CITIC 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 Limited are associated (or correlated) with CITIC DAMENG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC DAMENG has no effect on the direction of CITIC i.e., CITIC and CITIC DAMENG go up and down completely randomly.

Pair Corralation between CITIC and CITIC DAMENG

If you would invest (100.00) in CITIC DAMENG on October 8, 2024 and sell it today you would earn a total of  100.00  from holding CITIC DAMENG or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

CITIC Limited  vs.  CITIC DAMENG

CITIC Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CITIC Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

CITIC DAMENG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CITIC DAMENG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, CITIC DAMENG is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with CITIC and CITIC DAMENG

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

The idea behind CITIC Limited and CITIC DAMENG 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.