Correlation Between CITIC Securities and Dow Jones
Can any of the company-specific risk be diversified away by investing in both CITIC Securities and Dow Jones 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 CITIC Securities and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CITIC Securities Co and Dow Jones Industrial, you can compare the effects of market volatilities on CITIC Securities and Dow Jones 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 Securities with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC Securities and Dow Jones.
Diversification Opportunities for CITIC Securities and Dow Jones
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CITIC and Dow is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Securities Co and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and CITIC Securities 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 Securities Co are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of CITIC Securities i.e., CITIC Securities and Dow Jones go up and down completely randomly.
Pair Corralation between CITIC Securities and Dow Jones
Assuming the 90 days horizon CITIC Securities Co is expected to generate 11.09 times more return on investment than Dow Jones. However, CITIC Securities is 11.09 times more volatile than Dow Jones Industrial. It trades about 0.11 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.37 per unit of risk. If you would invest 2,476 in CITIC Securities Co on September 4, 2024 and sell it today you would earn a total of 379.00 from holding CITIC Securities Co or generate 15.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.91% |
| Values | Daily Returns |
CITIC Securities Co vs. Dow Jones Industrial
Performance |
| Timeline |
CITIC Securities and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
CITIC Securities Co
Pair trading matchups for CITIC Securities
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with CITIC Securities and Dow Jones
The main advantage of trading using opposite CITIC Securities and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIC Securities position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| CITIC Securities vs. First Tractor | CITIC Securities vs. Ag Growth International | CITIC Securities vs. AmeraMex International | CITIC Securities vs. Arts Way Manufacturing Co |
| Dow Jones vs. Gentex | Dow Jones vs. American Axle Manufacturing | Dow Jones vs. Pearson PLC ADR | Dow Jones vs. Marine Products |
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.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |