Correlation Between Daito Trust and CITIC
Can any of the company-specific risk be diversified away by investing in both Daito Trust 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 Daito Trust and CITIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daito Trust Construction and CITIC LTD ADR5, you can compare the effects of market volatilities on Daito Trust 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 Daito Trust with a short position of CITIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daito Trust and CITIC.
Diversification Opportunities for Daito Trust and CITIC
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Daito and CITIC is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Daito Trust Construction and CITIC LTD ADR5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC LTD ADR5 and Daito Trust 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 Daito Trust Construction 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 LTD ADR5 has no effect on the direction of Daito Trust i.e., Daito Trust and CITIC go up and down completely randomly.
Pair Corralation between Daito Trust and CITIC
Assuming the 90 days horizon Daito Trust is expected to generate 2.1 times less return on investment than CITIC. But when comparing it to its historical volatility, Daito Trust Construction is 1.53 times less risky than CITIC. It trades about 0.03 of its potential returns per unit of risk. CITIC LTD ADR5 is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 396.00 in CITIC LTD ADR5 on September 20, 2024 and sell it today you would earn a total of 124.00 from holding CITIC LTD ADR5 or generate 31.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daito Trust Construction vs. CITIC LTD ADR5
Performance |
| Timeline |
| Daito Trust Construction |
| CITIC LTD ADR5 |
Daito Trust and CITIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daito Trust and CITIC
The main advantage of trading using opposite Daito Trust and CITIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daito Trust 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.| Daito Trust vs. Superior Plus Corp | Daito Trust vs. SIVERS SEMICONDUCTORS AB | Daito Trust vs. Reliance Steel Aluminum | Daito Trust vs. CHINA HUARONG ENERHD 50 |
| CITIC vs. AIR PRODCHEMICALS | CITIC vs. Daito Trust Construction | CITIC vs. Sumitomo Mitsui Construction | CITIC vs. Mitsui Chemicals |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Stocks Directory Find actively traded stocks across global markets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |