Correlation Between CITIC Resources and Cornish Metals

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

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

Diversification Opportunities for CITIC Resources and Cornish Metals

-0.14

Correlation Coefficient

CITIC Resources  Cornish Metals

Good diversification

The 3 months correlation between CITIC and Cornish is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Resources Holdings and Cornish Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornish Metals and CITIC Resources 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 Resources Holdings are associated (or correlated) with Cornish Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornish Metals has no effect on the direction of CITIC Resources i.e., CITIC Resources and Cornish Metals go up and down completely randomly.

Pair Corralation between CITIC Resources and Cornish Metals

If you would invest  9.00  in Cornish Metals on September 3, 2024 and sell it today you would lose (3.00) from holding Cornish Metals or give up 33.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

CITIC Resources Holdings  vs.  Cornish Metals

CITIC Resources Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Cornish Metals

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cornish Metals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal technical and fundamental indicators, Cornish Metals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CITIC Resources and Cornish Metals

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

The idea behind CITIC Resources Holdings and Cornish Metals 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.