Correlation Between CITIC Securities and Fossil Group

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

By analyzing existing cross correlation between CITIC Securities Co and Fossil Group 7, you can compare the effects of market volatilities on CITIC Securities and Fossil Group 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 Fossil Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC Securities and Fossil Group.

Diversification Opportunities for CITIC Securities and Fossil Group

0.75

Correlation Coefficient

CITIC Securities  Fossil Group

Poor diversification

The 3 months correlation between CITIC and Fossil is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Securities Co and Fossil Group 7 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fossil Group 7 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 Co are associated (or correlated) with Fossil Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fossil Group 7 has no effect on the direction of CITIC Securities i.e., CITIC Securities and Fossil Group go up and down completely randomly.

Pair Corralation between CITIC Securities and Fossil Group

Assuming the 90 days horizon CITIC Securities Co is expected to generate 0.92 times more return on investment than Fossil Group. However, CITIC Securities Co is 1.09 times less risky than Fossil Group. It trades about 0.23 of its potential returns per unit of risk. Fossil Group 7 is currently generating about 0.19 per unit of risk. If you would invest  2,525  in CITIC Securities Co on May 18, 2025 and sell it today you would earn a total of  1,100  from holding CITIC Securities Co or generate 43.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

CITIC Securities Co  vs.  Fossil Group 7

CITIC Securities

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CITIC Securities Co are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical indicators, CITIC Securities showed solid returns over the last few months and may actually be approaching a breakup point.

Fossil Group 7

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fossil Group 7 are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, Fossil Group disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CITIC Securities and Fossil Group

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

The idea behind CITIC Securities Co and Fossil Group 7 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.