Correlation Between Blackstone Minerals and CITIC Resources

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

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

Diversification Opportunities for Blackstone Minerals and CITIC Resources

-0.19

Correlation Coefficient

Blackstone Minerals  CITIC Resources

Good diversification

The 3 months correlation between Blackstone and CITIC is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Minerals and CITIC Resources Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC Resources Holdings and Blackstone Minerals 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 Blackstone Minerals are associated (or correlated) with CITIC Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC Resources Holdings has no effect on the direction of Blackstone Minerals i.e., Blackstone Minerals and CITIC Resources go up and down completely randomly.

Pair Corralation between Blackstone Minerals and CITIC Resources

If you would invest  1.76  in Blackstone Minerals on September 22, 2024 and sell it today you would lose (0.26) from holding Blackstone Minerals or give up 14.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

Blackstone Minerals  vs.  CITIC Resources Holdings

Blackstone Minerals

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blackstone Minerals are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Blackstone Minerals reported solid returns over the last few months and may actually be approaching a breakup point.

CITIC Resources Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CITIC Resources Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, CITIC Resources is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Blackstone Minerals and CITIC Resources

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

The idea behind Blackstone Minerals and CITIC Resources 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 Commodity Directory module to find actively traded commodities issued by global exchanges.