Correlation Between CITIC and Cibl
Can any of the company-specific risk be diversified away by investing in both CITIC and Cibl 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 Cibl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CITIC Limited and Cibl Inc, you can compare the effects of market volatilities on CITIC and Cibl 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 Cibl. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC and Cibl.
Diversification Opportunities for CITIC and Cibl
Modest diversification
The 3 months correlation between CITIC and Cibl is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Limited and Cibl Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cibl Inc 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 Cibl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cibl Inc has no effect on the direction of CITIC i.e., CITIC and Cibl go up and down completely randomly.
Pair Corralation between CITIC and Cibl
Assuming the 90 days horizon CITIC Limited is expected to generate 1.79 times more return on investment than Cibl. However, CITIC is 1.79 times more volatile than Cibl Inc. It trades about 0.08 of its potential returns per unit of risk. Cibl Inc is currently generating about 0.0 per unit of risk. If you would invest 88.00 in CITIC Limited on September 1, 2024 and sell it today you would earn a total of 22.00 from holding CITIC Limited or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.06% |
| Values | Daily Returns |
CITIC Limited vs. Cibl Inc
Performance |
| Timeline |
| CITIC Limited |
| Cibl Inc |
CITIC and Cibl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITIC and Cibl
The main advantage of trading using opposite CITIC and Cibl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIC position performs unexpectedly, Cibl 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 Cibl will offset losses from the drop in Cibl's long position.| CITIC vs. Molson Coors Brewing | CITIC vs. FTAI Aviation Ltd | CITIC vs. Ambev SA ADR | CITIC vs. China Aircraft Leasing |
| Cibl vs. Alliance Recovery | Cibl vs. Agro Capital Management | Cibl vs. Ayala | Cibl vs. Alliance Global Group |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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