Correlation Between CITIC and Toshiba
Can any of the company-specific risk be diversified away by investing in both CITIC and Toshiba 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 Toshiba into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CITIC Limited and Toshiba, you can compare the effects of market volatilities on CITIC and Toshiba 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 Toshiba. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC and Toshiba.
Diversification Opportunities for CITIC and Toshiba
Very good diversification
The 3 months correlation between CITIC and Toshiba is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Limited and Toshiba in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toshiba 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 Toshiba. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toshiba has no effect on the direction of CITIC i.e., CITIC and Toshiba go up and down completely randomly.
Pair Corralation between CITIC and Toshiba
If you would invest 77.00 in CITIC Limited on September 3, 2024 and sell it today you would earn a total of 33.00 from holding CITIC Limited or generate 42.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.6% |
| Values | Daily Returns |
CITIC Limited vs. Toshiba
Performance |
| Timeline |
| CITIC Limited |
| Toshiba |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CITIC and Toshiba Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITIC and Toshiba
The main advantage of trading using opposite CITIC and Toshiba positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIC position performs unexpectedly, Toshiba 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 Toshiba will offset losses from the drop in Toshiba's long position.The idea behind CITIC Limited and Toshiba pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Toshiba vs. Chester Mining | Toshiba vs. Ambev SA ADR | Toshiba vs. Ispire Technology Common | Toshiba vs. Papaya Growth Opportunity |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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