Correlation Between FONIX MOBILE and CITIC

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

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

Diversification Opportunities for FONIX MOBILE and CITIC

0.46

Correlation Coefficient

FONIX MOBILE  CITIC

Very weak diversification

The 3 months correlation between FONIX and CITIC is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding FONIX MOBILE PLC and CITIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC and FONIX MOBILE 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 FONIX MOBILE PLC are associated (or correlated) with CITIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC has no effect on the direction of FONIX MOBILE i.e., FONIX MOBILE and CITIC go up and down completely randomly.

Pair Corralation between FONIX MOBILE and CITIC

Assuming the 90 days horizon FONIX MOBILE PLC is expected to under-perform the CITIC. But the stock apears to be less risky and, when comparing its historical volatility, FONIX MOBILE PLC is 1.1 times less risky than CITIC. The stock trades about -0.09 of its potential returns per unit of risk. The CITIC is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  108.00  in CITIC on October 24, 2024 and sell it today you would lose (2.00) from holding CITIC or give up 1.85% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

FONIX MOBILE PLC  vs.  CITIC

FONIX MOBILE PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FONIX MOBILE PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak 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

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CITIC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, CITIC is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with FONIX MOBILE and CITIC

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

The idea behind FONIX MOBILE PLC and CITIC 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.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.