Correlation Between CITIC Resources and Unilever
Can any of the company-specific risk be diversified away by investing in both CITIC Resources and Unilever 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 Unilever 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 The Unilever Group, you can compare the effects of market volatilities on CITIC Resources and Unilever 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 Unilever. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC Resources and Unilever.
Diversification Opportunities for CITIC Resources and Unilever
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CITIC and Unilever is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Resources Holdings and The Unilever Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unilever Group 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 Unilever. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unilever Group has no effect on the direction of CITIC Resources i.e., CITIC Resources and Unilever go up and down completely randomly.
Pair Corralation between CITIC Resources and Unilever
If you would invest (100.00) in The Unilever Group on February 12, 2024 and sell it today you would earn a total of 100.00 from holding The Unilever Group or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
CITIC Resources Holdings vs. The Unilever Group
Performance |
Timeline |
CITIC Resources Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Unilever Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CITIC Resources and Unilever Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CITIC Resources and Unilever
The main advantage of trading using opposite CITIC Resources and Unilever positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIC Resources position performs unexpectedly, Unilever 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 Unilever will offset losses from the drop in Unilever's long position.CITIC Resources vs. OM Holdings Limited | CITIC Resources vs. Sherritt International | CITIC Resources vs. AMG Advanced Metallurgical | CITIC Resources vs. Metals X Limited |
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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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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