Correlation Between CITIC and CITIC RESHLDGS
Can any of the company-specific risk be diversified away by investing in both CITIC and CITIC RESHLDGS 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 RESHLDGS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CITIC and CITIC RESHLDGS HD, you can compare the effects of market volatilities on CITIC and CITIC RESHLDGS 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 RESHLDGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC and CITIC RESHLDGS.
Diversification Opportunities for CITIC and CITIC RESHLDGS
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CITIC and CITIC is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding CITIC and CITIC RESHLDGS HD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC RESHLDGS HD 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 are associated (or correlated) with CITIC RESHLDGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC RESHLDGS HD has no effect on the direction of CITIC i.e., CITIC and CITIC RESHLDGS go up and down completely randomly.
Pair Corralation between CITIC and CITIC RESHLDGS
Assuming the 90 days trading horizon CITIC is expected to generate 0.8 times more return on investment than CITIC RESHLDGS. However, CITIC is 1.25 times less risky than CITIC RESHLDGS. It trades about -0.16 of its potential returns per unit of risk. CITIC RESHLDGS HD is currently generating about -0.22 per unit of risk. If you would invest 111.00 in CITIC on October 8, 2024 and sell it today you would lose (5.00) from holding CITIC or give up 4.5% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
CITIC vs. CITIC RESHLDGS HD
Performance |
Timeline |
CITIC |
CITIC RESHLDGS HD |
CITIC and CITIC RESHLDGS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CITIC and CITIC RESHLDGS
The main advantage of trading using opposite CITIC and CITIC RESHLDGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIC position performs unexpectedly, CITIC RESHLDGS 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 RESHLDGS will offset losses from the drop in CITIC RESHLDGS's long position.CITIC vs. Spirent Communications plc | CITIC vs. Cairo Communication SpA | CITIC vs. FONIX MOBILE PLC | CITIC vs. FIH MOBILE |
CITIC RESHLDGS vs. Calibre Mining Corp | CITIC RESHLDGS vs. Jacquet Metal Service | CITIC RESHLDGS vs. ARDAGH METAL PACDL 0001 | CITIC RESHLDGS vs. 24SEVENOFFICE GROUP AB |
Check out your portfolio center.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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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