Correlation Between CITIC and InfuSystems Holdings

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

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

Diversification Opportunities for CITIC and InfuSystems Holdings

-0.53

Correlation Coefficient

CITIC  InfuSystems Holdings

Excellent diversification

The 3 months correlation between CITIC and InfuSystems is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Limited and InfuSystems Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InfuSystems Holdings 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 InfuSystems Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InfuSystems Holdings has no effect on the direction of CITIC i.e., CITIC and InfuSystems Holdings go up and down completely randomly.

Pair Corralation between CITIC and InfuSystems Holdings

Assuming the 90 days horizon CITIC Limited is expected to generate 1.02 times more return on investment than InfuSystems Holdings. However, CITIC is 1.02 times more volatile than InfuSystems Holdings. It trades about 0.13 of its potential returns per unit of risk. InfuSystems Holdings is currently generating about -0.15 per unit of risk. If you would invest  111.00  in CITIC Limited on December 21, 2024 and sell it today you would earn a total of  27.00  from holding CITIC Limited or generate 24.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

CITIC Limited  vs.  InfuSystems Holdings

CITIC Limited

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CITIC Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain fundamental indicators, CITIC reported solid returns over the last few months and may actually be approaching a breakup point.

InfuSystems Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days InfuSystems Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with CITIC and InfuSystems Holdings

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

The idea behind CITIC Limited and InfuSystems Holdings 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.