Correlation Between CITIC Securities and Circle Internet

Can any of the company-specific risk be diversified away by investing in both CITIC Securities and Circle Internet 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 Securities and Circle Internet into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CITIC Securities and Circle Internet Group,, you can compare the effects of market volatilities on CITIC Securities and Circle Internet 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 Securities with a short position of Circle Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC Securities and Circle Internet.

Diversification Opportunities for CITIC Securities and Circle Internet

0.55

Correlation Coefficient

CITIC Securities  Circle Internet

Very weak diversification

The 3 months correlation between CITIC and Circle is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Securities and Circle Internet Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Circle Internet Group, and CITIC Securities 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 Securities are associated (or correlated) with Circle Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Circle Internet Group, has no effect on the direction of CITIC Securities i.e., CITIC Securities and Circle Internet go up and down completely randomly.

Pair Corralation between CITIC Securities and Circle Internet

Assuming the 90 days horizon CITIC Securities is expected to generate 19.18 times less return on investment than Circle Internet. But when comparing it to its historical volatility, CITIC Securities is 11.5 times less risky than Circle Internet. It trades about 0.13 of its potential returns per unit of risk. Circle Internet Group, is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  3,100  in Circle Internet Group, on May 8, 2025 and sell it today you would earn a total of  12,293  from holding Circle Internet Group, or generate 396.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	70.49%
Values	Daily Returns

CITIC Securities  vs.  Circle Internet Group,

CITIC Securities

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in CITIC Securities are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical indicators, CITIC Securities reported solid returns over the last few months and may actually be approaching a breakup point.

Circle Internet Group,

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Circle Internet Group, are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady fundamental indicators, Circle Internet disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CITIC Securities and Circle Internet

The main advantage of trading using opposite CITIC Securities and Circle Internet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIC Securities position performs unexpectedly, Circle Internet 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 Circle Internet will offset losses from the drop in Circle Internet's long position.

The idea behind CITIC Securities and Circle Internet Group, 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.

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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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.