Correlation Between Hitachi and CITIC
Can any of the company-specific risk be diversified away by investing in both Hitachi and CITIC 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 Hitachi and CITIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hitachi and CITIC Limited, you can compare the effects of market volatilities on Hitachi and CITIC 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 Hitachi with a short position of CITIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hitachi and CITIC.
Diversification Opportunities for Hitachi and CITIC
Very poor diversification
The 3 months correlation between Hitachi and CITIC is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Hitachi and CITIC Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC Limited and Hitachi 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 Hitachi are associated (or correlated) with CITIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC Limited has no effect on the direction of Hitachi i.e., Hitachi and CITIC go up and down completely randomly.
Pair Corralation between Hitachi and CITIC
Assuming the 90 days trading horizon Hitachi is expected to under-perform the CITIC. In addition to that, Hitachi is 1.23 times more volatile than CITIC Limited. It trades about -0.12 of its total potential returns per unit of risk. CITIC Limited is currently generating about -0.09 per unit of volatility. If you would invest 109.00 in CITIC Limited on August 29, 2024 and sell it today you would lose (5.00) from holding CITIC Limited or give up 4.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hitachi vs. CITIC Limited
Performance |
| Timeline |
| Hitachi |
| CITIC Limited |
Hitachi and CITIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hitachi and CITIC
The main advantage of trading using opposite Hitachi and CITIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hitachi position performs unexpectedly, CITIC 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 CITIC will offset losses from the drop in CITIC's long position.| Hitachi vs. ONWARD MEDICAL BV | Hitachi vs. SOLSTAD OFFSHORE NK | Hitachi vs. MEDICAL FACILITIES NEW | Hitachi vs. Diamyd Medical AB |
| CITIC vs. Superior Plus Corp | CITIC vs. NMI Holdings | CITIC vs. Origin Agritech | CITIC 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |