Correlation Between Marubeni and CITIC

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

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

Diversification Opportunities for Marubeni and CITIC

0.39

Correlation Coefficient

Marubeni  CITIC

Weak diversification

The 3 months correlation between Marubeni and CITIC is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Marubeni and CITIC Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC Limited and Marubeni 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 Marubeni 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 Marubeni i.e., Marubeni and CITIC go up and down completely randomly.

Pair Corralation between Marubeni and CITIC

Assuming the 90 days trading horizon Marubeni is expected to generate 2.02 times less return on investment than CITIC. But when comparing it to its historical volatility, Marubeni is 1.02 times less risky than CITIC. It trades about 0.1 of its potential returns per unit of risk. CITIC Limited is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  102.00  in CITIC Limited on May 5, 2025 and sell it today you would earn a total of  24.00  from holding CITIC Limited or generate 23.53% return on investment over 90 days.

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

Marubeni  vs.  CITIC Limited

Marubeni

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Marubeni are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Marubeni may actually be approaching a critical reversion point that can send shares even higher in September 2025.

CITIC Limited

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CITIC Limited are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CITIC reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Marubeni and CITIC

The main advantage of trading using opposite Marubeni and CITIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marubeni 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.

The idea behind Marubeni and CITIC Limited 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.