Correlation Between CITIC and CDL INVESTMENT
Can any of the company-specific risk be diversified away by investing in both CITIC and CDL INVESTMENT 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 CDL INVESTMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CITIC LTD ADR5 and CDL INVESTMENT, you can compare the effects of market volatilities on CITIC and CDL INVESTMENT 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 CDL INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC and CDL INVESTMENT.
Diversification Opportunities for CITIC and CDL INVESTMENT
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CITIC and CDL is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding CITIC LTD ADR5 and CDL INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDL INVESTMENT 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 LTD ADR5 are associated (or correlated) with CDL INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDL INVESTMENT has no effect on the direction of CITIC i.e., CITIC and CDL INVESTMENT go up and down completely randomly.
Pair Corralation between CITIC and CDL INVESTMENT
Assuming the 90 days trading horizon CITIC LTD ADR5 is expected to under-perform the CDL INVESTMENT. In addition to that, CITIC is 1.13 times more volatile than CDL INVESTMENT. It trades about -0.05 of its total potential returns per unit of risk. CDL INVESTMENT is currently generating about 0.24 per unit of volatility. If you would invest 39.00 in CDL INVESTMENT on September 1, 2024 and sell it today you would earn a total of 4.00 from holding CDL INVESTMENT or generate 10.26% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.65% |
Values | Daily Returns |
CITIC LTD ADR5 vs. CDL INVESTMENT
Performance |
Timeline |
CITIC LTD ADR5 |
CDL INVESTMENT |
CITIC and CDL INVESTMENT Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CITIC and CDL INVESTMENT
The main advantage of trading using opposite CITIC and CDL INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIC position performs unexpectedly, CDL INVESTMENT 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 CDL INVESTMENT will offset losses from the drop in CDL INVESTMENT's long position.CITIC vs. Strategic Education | CITIC vs. WisdomTree Investments | CITIC vs. CHINA EDUCATION GROUP | CITIC vs. Chuangs China Investments |
CDL INVESTMENT vs. SIVERS SEMICONDUCTORS AB | CDL INVESTMENT vs. Darden Restaurants | CDL INVESTMENT vs. Reliance Steel Aluminum | CDL INVESTMENT vs. Q2M Managementberatung AG |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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