Correlation Between TITAN MACHINERY and Citic Telecom
Can any of the company-specific risk be diversified away by investing in both TITAN MACHINERY 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 TITAN MACHINERY and Citic Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TITAN MACHINERY and Citic Telecom International, you can compare the effects of market volatilities on TITAN MACHINERY 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 TITAN MACHINERY with a short position of Citic Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of TITAN MACHINERY and Citic Telecom.
Diversification Opportunities for TITAN MACHINERY and Citic Telecom
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between TITAN and Citic is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding TITAN MACHINERY 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 TITAN MACHINERY 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 TITAN MACHINERY 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 TITAN MACHINERY i.e., TITAN MACHINERY and Citic Telecom go up and down completely randomly.
Pair Corralation between TITAN MACHINERY and Citic Telecom
Assuming the 90 days trading horizon TITAN MACHINERY is expected to generate 1.75 times more return on investment than Citic Telecom. However, TITAN MACHINERY is 1.75 times more volatile than Citic Telecom International. It trades about 0.17 of its potential returns per unit of risk. Citic Telecom International is currently generating about 0.09 per unit of risk. If you would invest 1,300 in TITAN MACHINERY on August 29, 2024 and sell it today you would earn a total of 170.00 from holding TITAN MACHINERY or generate 13.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TITAN MACHINERY vs. Citic Telecom International
Performance |
| Timeline |
| TITAN MACHINERY |
| Citic Telecom Intern |
TITAN MACHINERY and Citic Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TITAN MACHINERY and Citic Telecom
The main advantage of trading using opposite TITAN MACHINERY and Citic Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TITAN MACHINERY 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.| TITAN MACHINERY vs. Sabra Health Care | TITAN MACHINERY vs. EPSILON HEALTHCARE LTD | TITAN MACHINERY vs. RCM TECHNOLOGIES | TITAN MACHINERY vs. AAC TECHNOLOGHLDGADR |
| Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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