Correlation Between Cornish Metals and CITIC Resources

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

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

Diversification Opportunities for Cornish Metals and CITIC Resources

0.0

Correlation Coefficient

Cornish Metals  CITIC Resources

Pay attention - limited upside

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

Pair Corralation between Cornish Metals and CITIC Resources

If you would invest  11.00  in Cornish Metals on December 29, 2024 and sell it today you would earn a total of  1.00  from holding Cornish Metals or generate 9.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Cornish Metals  vs.  CITIC Resources Holdings

Cornish Metals

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cornish Metals are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Cornish Metals reported solid returns over the last few months and may actually be approaching a breakup point.

CITIC Resources Holdings

Risk-Adjusted Performance

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.

Pair Trading with Cornish Metals and CITIC Resources

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

The idea behind Cornish Metals and CITIC Resources 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.