Correlation Between CITIC Resources and AMG Advanced
Can any of the company-specific risk be diversified away by investing in both CITIC Resources and AMG Advanced 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 Resources and AMG Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CITIC Resources Holdings and AMG Advanced Metallurgical, you can compare the effects of market volatilities on CITIC Resources and AMG Advanced 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 Resources with a short position of AMG Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC Resources and AMG Advanced.
Diversification Opportunities for CITIC Resources and AMG Advanced
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CITIC and AMG is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Resources Holdings and AMG Advanced Metallurgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMG Advanced Metallu and CITIC Resources 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 Resources Holdings are associated (or correlated) with AMG Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMG Advanced Metallu has no effect on the direction of CITIC Resources i.e., CITIC Resources and AMG Advanced go up and down completely randomly.
Pair Corralation between CITIC Resources and AMG Advanced
Assuming the 90 days horizon CITIC Resources Holdings is expected to generate 2.77 times more return on investment than AMG Advanced. However, CITIC Resources is 2.77 times more volatile than AMG Advanced Metallurgical. It trades about 0.04 of its potential returns per unit of risk. AMG Advanced Metallurgical is currently generating about -0.04 per unit of risk. If you would invest 8.13 in CITIC Resources Holdings on September 3, 2024 and sell it today you would lose (0.13) from holding CITIC Resources Holdings or give up 1.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 33.0% |
| Values | Daily Returns |
CITIC Resources Holdings vs. AMG Advanced Metallurgical
Performance |
| Timeline |
| CITIC Resources Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| AMG Advanced Metallu |
CITIC Resources and AMG Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITIC Resources and AMG Advanced
The main advantage of trading using opposite CITIC Resources and AMG Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIC Resources position performs unexpectedly, AMG Advanced 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 AMG Advanced will offset losses from the drop in AMG Advanced's long position.| CITIC Resources vs. Sherritt International | CITIC Resources vs. Metals X Limited | CITIC Resources vs. Interra Copper Corp | CITIC Resources vs. Anglo American PLC |
| AMG Advanced vs. Qubec Nickel Corp | AMG Advanced vs. IGO Limited | AMG Advanced vs. Avarone Metals | AMG Advanced vs. Adriatic Metals PLC |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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