Correlation Between CITIC Metal and DR
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By analyzing existing cross correlation between CITIC Metal Co and DR Limited, you can compare the effects of market volatilities on CITIC Metal and DR 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 DR. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC Metal and DR.
Diversification Opportunities for CITIC Metal and DR
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CITIC and DR is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Metal Co and DR Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DR Limited 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 DR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DR Limited has no effect on the direction of CITIC Metal i.e., CITIC Metal and DR go up and down completely randomly.
Pair Corralation between CITIC Metal and DR
Assuming the 90 days trading horizon CITIC Metal Co is expected to under-perform the DR. But the stock apears to be less risky and, when comparing its historical volatility, CITIC Metal Co is 2.49 times less risky than DR. The stock trades about -0.16 of its potential returns per unit of risk. The DR Limited is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,419 in DR Limited on September 14, 2024 and sell it today you would earn a total of 182.00 from holding DR Limited or generate 7.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CITIC Metal Co vs. DR Limited
Performance |
| Timeline |
| CITIC Metal |
| DR Limited |
CITIC Metal and DR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITIC Metal and DR
The main advantage of trading using opposite CITIC Metal and DR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIC Metal position performs unexpectedly, DR 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 DR will offset losses from the drop in DR's long position.| CITIC Metal vs. Zijin Mining Group | CITIC Metal vs. Wanhua Chemical Group | CITIC Metal vs. Baoshan Iron Steel | CITIC Metal vs. Shandong Gold Mining |
| DR vs. Cultural Investment Holdings | DR vs. Jiangsu Yueda Investment | DR vs. CITIC Metal Co | DR vs. Zhejiang Yayi Metal |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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