Correlation Between CITIC and FDG Electric

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

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

Diversification Opportunities for CITIC and FDG Electric

0.0

Correlation Coefficient

CITIC  FDG Electric

Pay attention - limited upside

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

Pair Corralation between CITIC and FDG Electric

If you would invest  0.01  in FDG Electric Vehicles on October 22, 2024 and sell it today you would earn a total of  0.00  from holding FDG Electric Vehicles or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	90.0%
Values	Daily Returns

CITIC Limited  vs.  FDG Electric Vehicles

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 weak performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

FDG Electric Vehicles

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with CITIC and FDG Electric

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

The idea behind CITIC Limited and FDG Electric Vehicles 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.