Correlation Between Jardine Matheson and CITIC
Can any of the company-specific risk be diversified away by investing in both Jardine Matheson 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 Jardine Matheson and CITIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jardine Matheson Holdings and CITIC Limited, you can compare the effects of market volatilities on Jardine Matheson 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 Jardine Matheson with a short position of CITIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jardine Matheson and CITIC.
Diversification Opportunities for Jardine Matheson and CITIC
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Jardine and CITIC is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Jardine Matheson Holdings and CITIC Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC Limited and Jardine Matheson 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 Jardine Matheson Holdings 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 Jardine Matheson i.e., Jardine Matheson and CITIC go up and down completely randomly.
Pair Corralation between Jardine Matheson and CITIC
Assuming the 90 days horizon Jardine Matheson Holdings is expected to under-perform the CITIC. But the pink sheet apears to be less risky and, when comparing its historical volatility, Jardine Matheson Holdings is 2.28 times less risky than CITIC. The pink sheet trades about -0.03 of its potential returns per unit of risk. The CITIC Limited is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 86.00 in CITIC Limited on January 20, 2024 and sell it today you would earn a total of 7.00 from holding CITIC Limited or generate 8.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 83.43% |
| Values | Daily Returns |
Jardine Matheson Holdings vs. CITIC Limited
Performance |
| Timeline |
| Jardine Matheson Holdings |
| CITIC Limited |
Jardine Matheson and CITIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jardine Matheson and CITIC
The main advantage of trading using opposite Jardine Matheson and CITIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jardine Matheson 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.| Jardine Matheson vs. V2X Inc | Jardine Matheson vs. National Presto Industries | Jardine Matheson vs. Kaman | Jardine Matheson vs. Woodward |
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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