Correlation Between SOGECLAIR and CITIC Telecom
Can any of the company-specific risk be diversified away by investing in both SOGECLAIR 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 SOGECLAIR and CITIC Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOGECLAIR SA INH and CITIC Telecom International, you can compare the effects of market volatilities on SOGECLAIR 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 SOGECLAIR with a short position of CITIC Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOGECLAIR and CITIC Telecom.
Diversification Opportunities for SOGECLAIR and CITIC Telecom
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between SOGECLAIR and CITIC is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding SOGECLAIR SA INH 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 SOGECLAIR 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 SOGECLAIR SA INH 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 SOGECLAIR i.e., SOGECLAIR and CITIC Telecom go up and down completely randomly.
Pair Corralation between SOGECLAIR and CITIC Telecom
Assuming the 90 days horizon SOGECLAIR SA INH is expected to generate 1.6 times more return on investment than CITIC Telecom. However, SOGECLAIR is 1.6 times more volatile than CITIC Telecom International. It trades about 0.05 of its potential returns per unit of risk. CITIC Telecom International is currently generating about -0.04 per unit of risk. If you would invest 1,710 in SOGECLAIR SA INH on November 3, 2024 and sell it today you would earn a total of 60.00 from holding SOGECLAIR SA INH or generate 3.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SOGECLAIR SA INH vs. CITIC Telecom International
Performance |
| Timeline |
| SOGECLAIR SA INH |
| CITIC Telecom Intern |
SOGECLAIR and CITIC Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOGECLAIR and CITIC Telecom
The main advantage of trading using opposite SOGECLAIR and CITIC Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOGECLAIR 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.| SOGECLAIR vs. Clean Energy Fuels | SOGECLAIR vs. UNITED UTILITIES GR | SOGECLAIR vs. Compugroup Medical SE | SOGECLAIR vs. Clearside Biomedical |
| CITIC Telecom vs. EIDESVIK OFFSHORE NK | CITIC Telecom vs. BW OFFSHORE LTD | CITIC Telecom vs. ANGLO ASIAN MINING | CITIC Telecom vs. INSURANCE AUST GRP |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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