Correlation Between CITIC and Crypto

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

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

Diversification Opportunities for CITIC and Crypto

0.42

Correlation Coefficient

CITIC  Crypto

Very weak diversification

The 3 months correlation between CITIC and Crypto is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Limited and Crypto Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crypto and CITIC 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 Limited are associated (or correlated) with Crypto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crypto has no effect on the direction of CITIC i.e., CITIC and Crypto go up and down completely randomly.

Pair Corralation between CITIC and Crypto

Assuming the 90 days horizon CITIC is expected to generate 16.81 times less return on investment than Crypto. But when comparing it to its historical volatility, CITIC Limited is 5.12 times less risky than Crypto. It trades about 0.05 of its potential returns per unit of risk. Crypto Co is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  0.10  in Crypto Co on May 22, 2025 and sell it today you would earn a total of  0.20  from holding Crypto Co or generate 200.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

CITIC Limited  vs.  Crypto Co

CITIC Limited

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in CITIC Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, CITIC may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Crypto

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Crypto Co are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain fundamental indicators, Crypto showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CITIC and Crypto

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

The idea behind CITIC Limited and Crypto Co 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 CEOs Directory module to screen CEOs from public companies around the world.