Correlation Between Citicore Energy and 8990 Holdings

Can any of the company-specific risk be diversified away by investing in both Citicore Energy and 8990 Holdings 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 Citicore Energy and 8990 Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citicore Energy REIT and 8990 Holdings, you can compare the effects of market volatilities on Citicore Energy and 8990 Holdings 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 Citicore Energy with a short position of 8990 Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citicore Energy and 8990 Holdings.

Diversification Opportunities for Citicore Energy and 8990 Holdings

-0.39

Correlation Coefficient

Citicore Energy  8990 Holdings

Very good diversification

The 3 months correlation between Citicore and 8990 is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Citicore Energy REIT and 8990 Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 8990 Holdings and Citicore Energy 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 Citicore Energy REIT are associated (or correlated) with 8990 Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 8990 Holdings has no effect on the direction of Citicore Energy i.e., Citicore Energy and 8990 Holdings go up and down completely randomly.

Pair Corralation between Citicore Energy and 8990 Holdings

Assuming the 90 days trading horizon Citicore Energy REIT is expected to generate 0.46 times more return on investment than 8990 Holdings. However, Citicore Energy REIT is 2.19 times less risky than 8990 Holdings. It trades about 0.03 of its potential returns per unit of risk. 8990 Holdings is currently generating about -0.05 per unit of risk. If you would invest  296.00  in Citicore Energy REIT on August 23, 2024 and sell it today you would earn a total of  5.00  from holding Citicore Energy REIT or generate 1.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	87.1%
Values	Daily Returns

Citicore Energy REIT  vs.  8990 Holdings

Citicore Energy REIT

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citicore Energy REIT are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, Citicore Energy is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

8990 Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 8990 Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unsteady performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Citicore Energy and 8990 Holdings

The main advantage of trading using opposite Citicore Energy and 8990 Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citicore Energy position performs unexpectedly, 8990 Holdings 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 8990 Holdings will offset losses from the drop in 8990 Holdings' long position.

The idea behind Citicore Energy REIT and 8990 Holdings 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.