Correlation Between CiT and Taoping
Can any of the company-specific risk be diversified away by investing in both CiT and Taoping 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 CiT and Taoping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CiT Inc and Taoping, you can compare the effects of market volatilities on CiT and Taoping 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 CiT with a short position of Taoping. Check out your portfolio center. Please also check ongoing floating volatility patterns of CiT and Taoping.
Diversification Opportunities for CiT and Taoping
Modest diversification
The 3 months correlation between CiT and Taoping is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding CiT Inc and Taoping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taoping and CiT 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 CiT Inc are associated (or correlated) with Taoping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taoping has no effect on the direction of CiT i.e., CiT and Taoping go up and down completely randomly.
Pair Corralation between CiT and Taoping
Given the investment horizon of 90 days CiT Inc is expected to generate 1.14 times more return on investment than Taoping. However, CiT is 1.14 times more volatile than Taoping. It trades about -0.01 of its potential returns per unit of risk. Taoping is currently generating about -0.46 per unit of risk. If you would invest 697.00 in CiT Inc on August 24, 2024 and sell it today you would lose (14.00) from holding CiT Inc or give up 2.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CiT Inc vs. Taoping
Performance |
| Timeline |
| CiT Inc |
| Taoping |
CiT and Taoping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CiT and Taoping
The main advantage of trading using opposite CiT and Taoping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CiT position performs unexpectedly, Taoping 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 Taoping will offset losses from the drop in Taoping's long position.| CiT vs. Global Blue Group | CiT vs. EverCommerce | CiT vs. CSG Systems International | CiT vs. Consensus Cloud Solutions |
| Taoping vs. TonnerOne World Holdings | Taoping vs. Global Blue Group | Taoping vs. Bridgeline Digital | Taoping vs. Cerberus Cyber Sentinel |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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