Correlation Between CITIC Metal and HaiXin Foods
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By analyzing existing cross correlation between CITIC Metal Co and HaiXin Foods Co, you can compare the effects of market volatilities on CITIC Metal and HaiXin Foods 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 Metal with a short position of HaiXin Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC Metal and HaiXin Foods.
Diversification Opportunities for CITIC Metal and HaiXin Foods
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CITIC and HaiXin is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Metal Co and HaiXin Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HaiXin Foods and CITIC Metal 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 Metal Co are associated (or correlated) with HaiXin Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HaiXin Foods has no effect on the direction of CITIC Metal i.e., CITIC Metal and HaiXin Foods go up and down completely randomly.
Pair Corralation between CITIC Metal and HaiXin Foods
Assuming the 90 days trading horizon CITIC Metal Co is expected to generate 0.3 times more return on investment than HaiXin Foods. However, CITIC Metal Co is 3.37 times less risky than HaiXin Foods. It trades about 0.13 of its potential returns per unit of risk. HaiXin Foods Co is currently generating about -0.06 per unit of risk. If you would invest 713.00 in CITIC Metal Co on November 7, 2024 and sell it today you would earn a total of 12.00 from holding CITIC Metal Co or generate 1.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CITIC Metal Co vs. HaiXin Foods Co
Performance |
| Timeline |
| CITIC Metal |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| HaiXin Foods |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CITIC Metal and HaiXin Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITIC Metal and HaiXin Foods
The main advantage of trading using opposite CITIC Metal and HaiXin Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIC Metal position performs unexpectedly, HaiXin Foods 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 HaiXin Foods will offset losses from the drop in HaiXin Foods' long position.The idea behind CITIC Metal Co and HaiXin Foods Co 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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