Correlation Between Alpine 4 and Citic
Can any of the company-specific risk be diversified away by investing in both Alpine 4 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 Alpine 4 and Citic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alpine 4 Holdings and Citic Ltd ADR, you can compare the effects of market volatilities on Alpine 4 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 Alpine 4 with a short position of Citic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpine 4 and Citic.
Diversification Opportunities for Alpine 4 and Citic
Very good diversification
The 3 months correlation between Alpine and Citic is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Alpine 4 Holdings and Citic Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citic Ltd ADR and Alpine 4 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 Alpine 4 Holdings 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 ADR has no effect on the direction of Alpine 4 i.e., Alpine 4 and Citic go up and down completely randomly.
Pair Corralation between Alpine 4 and Citic
Given the investment horizon of 90 days Alpine 4 Holdings is expected to under-perform the Citic. In addition to that, Alpine 4 is 4.44 times more volatile than Citic Ltd ADR. It trades about -0.77 of its total potential returns per unit of risk. Citic Ltd ADR is currently generating about -0.01 per unit of volatility. If you would invest 615.00 in Citic Ltd ADR on August 25, 2024 and sell it today you would lose (8.00) from holding Citic Ltd ADR or give up 1.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 18.18% |
| Values | Daily Returns |
Alpine 4 Holdings vs. Citic Ltd ADR
Performance |
| Timeline |
| Alpine 4 Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Citic Ltd ADR |
Alpine 4 and Citic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alpine 4 and Citic
The main advantage of trading using opposite Alpine 4 and Citic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpine 4 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.| Alpine 4 vs. Steel Partners Holdings | Alpine 4 vs. FTAI Infrastructure | Alpine 4 vs. Griffon | Alpine 4 vs. Matthews International |
| Citic vs. Honeywell International | Citic vs. MDU Resources Group | Citic vs. Compass Diversified Holdings | Citic vs. Valmont Industries |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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