Correlation Between REINET INVESTMENTS and CITIC
Can any of the company-specific risk be diversified away by investing in both REINET INVESTMENTS 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 REINET INVESTMENTS and CITIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REINET INVESTMENTS SCA and CITIC Limited, you can compare the effects of market volatilities on REINET INVESTMENTS 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 REINET INVESTMENTS with a short position of CITIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of REINET INVESTMENTS and CITIC.
Diversification Opportunities for REINET INVESTMENTS and CITIC
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between REINET and CITIC is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding REINET INVESTMENTS SCA and CITIC Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC Limited and REINET INVESTMENTS 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 REINET INVESTMENTS SCA 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 REINET INVESTMENTS i.e., REINET INVESTMENTS and CITIC go up and down completely randomly.
Pair Corralation between REINET INVESTMENTS and CITIC
Assuming the 90 days horizon REINET INVESTMENTS is expected to generate 9.93 times less return on investment than CITIC. But when comparing it to its historical volatility, REINET INVESTMENTS SCA is 2.65 times less risky than CITIC. It trades about 0.04 of its potential returns per unit of risk. CITIC Limited is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 23.00 in CITIC Limited on September 3, 2024 and sell it today you would earn a total of 80.00 from holding CITIC Limited or generate 347.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
REINET INVESTMENTS SCA vs. CITIC Limited
Performance |
| Timeline |
| REINET INVESTMENTS SCA |
| CITIC Limited |
REINET INVESTMENTS and CITIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REINET INVESTMENTS and CITIC
The main advantage of trading using opposite REINET INVESTMENTS and CITIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REINET INVESTMENTS 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.| REINET INVESTMENTS vs. NIPPON STEEL SPADR | REINET INVESTMENTS vs. Broadcom | REINET INVESTMENTS vs. CECO ENVIRONMENTAL | REINET INVESTMENTS vs. TEXAS ROADHOUSE |
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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