Correlation Between CITIC and Seaboard
Can any of the company-specific risk be diversified away by investing in both CITIC and Seaboard 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 and Seaboard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CITIC Limited and Seaboard, you can compare the effects of market volatilities on CITIC and Seaboard 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 with a short position of Seaboard. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC and Seaboard.
Diversification Opportunities for CITIC and Seaboard
Very good diversification
The 3 months correlation between CITIC and Seaboard is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Limited and Seaboard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seaboard and CITIC 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 Limited are associated (or correlated) with Seaboard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seaboard has no effect on the direction of CITIC i.e., CITIC and Seaboard go up and down completely randomly.
Pair Corralation between CITIC and Seaboard
Assuming the 90 days horizon CITIC Limited is expected to generate 1.32 times more return on investment than Seaboard. However, CITIC is 1.32 times more volatile than Seaboard. It trades about -0.05 of its potential returns per unit of risk. Seaboard is currently generating about -0.14 per unit of risk. If you would invest 106.00 in CITIC Limited on September 1, 2024 and sell it today you would lose (3.00) from holding CITIC Limited or give up 2.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
CITIC Limited vs. Seaboard
Performance |
| Timeline |
| CITIC Limited |
| Seaboard |
CITIC and Seaboard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITIC and Seaboard
The main advantage of trading using opposite CITIC and Seaboard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIC position performs unexpectedly, Seaboard 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 Seaboard will offset losses from the drop in Seaboard's long position.| CITIC vs. Caltagirone SpA | CITIC vs. REINET INVESTMENTS SCA | CITIC vs. BlueScope Steel Limited | CITIC vs. Tianjin Capital Environmental |
| Seaboard vs. Superior Plus Corp | Seaboard vs. NMI Holdings | Seaboard vs. Origin Agritech | Seaboard vs. SIVERS SEMICONDUCTORS AB |
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 CEOs Directory module to screen CEOs from public companies around the world.
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