Correlation Between ADYEN NV and Citic Telecom
Can any of the company-specific risk be diversified away by investing in both ADYEN NV and Citic Telecom 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 ADYEN NV and Citic Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADYEN NV UNSPADR001 and Citic Telecom International, you can compare the effects of market volatilities on ADYEN NV and Citic Telecom 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 ADYEN NV with a short position of Citic Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADYEN NV and Citic Telecom.
Diversification Opportunities for ADYEN NV and Citic Telecom
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ADYEN and Citic is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding ADYEN NV UNSPADR001 and Citic Telecom International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citic Telecom Intern and ADYEN NV 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 ADYEN NV UNSPADR001 are associated (or correlated) with Citic Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citic Telecom Intern has no effect on the direction of ADYEN NV i.e., ADYEN NV and Citic Telecom go up and down completely randomly.
Pair Corralation between ADYEN NV and Citic Telecom
Assuming the 90 days trading horizon ADYEN NV UNSPADR001 is expected to generate 1.66 times more return on investment than Citic Telecom. However, ADYEN NV is 1.66 times more volatile than Citic Telecom International. It trades about 0.08 of its potential returns per unit of risk. Citic Telecom International is currently generating about -0.1 per unit of risk. If you would invest 1,390 in ADYEN NV UNSPADR001 on October 24, 2024 and sell it today you would earn a total of 60.00 from holding ADYEN NV UNSPADR001 or generate 4.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
ADYEN NV UNSPADR001 vs. Citic Telecom International
Performance |
| Timeline |
| ADYEN NV UNSPADR001 |
| Citic Telecom Intern |
ADYEN NV and Citic Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADYEN NV and Citic Telecom
The main advantage of trading using opposite ADYEN NV and Citic Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADYEN NV position performs unexpectedly, Citic Telecom 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 Telecom will offset losses from the drop in Citic Telecom's long position.| ADYEN NV vs. Citic Telecom International | ADYEN NV vs. Highlight Communications AG | ADYEN NV vs. CITIC Telecom International | ADYEN NV vs. China Communications Services |
| Citic Telecom vs. BE Semiconductor Industries | Citic Telecom vs. Magnachip Semiconductor | Citic Telecom vs. Nomad Foods | Citic Telecom vs. High Liner Foods |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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