Correlation Between AVITA Medical and Citic Telecom
Can any of the company-specific risk be diversified away by investing in both AVITA Medical 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 AVITA Medical and Citic Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AVITA Medical and Citic Telecom International, you can compare the effects of market volatilities on AVITA Medical 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 AVITA Medical with a short position of Citic Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVITA Medical and Citic Telecom.
Diversification Opportunities for AVITA Medical and Citic Telecom
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AVITA and Citic is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding AVITA Medical 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 AVITA Medical 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 AVITA Medical 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 AVITA Medical i.e., AVITA Medical and Citic Telecom go up and down completely randomly.
Pair Corralation between AVITA Medical and Citic Telecom
Assuming the 90 days trading horizon AVITA Medical is expected to generate 0.74 times more return on investment than Citic Telecom. However, AVITA Medical is 1.35 times less risky than Citic Telecom. It trades about 0.22 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 159.00 in AVITA Medical on August 29, 2024 and sell it today you would earn a total of 93.00 from holding AVITA Medical or generate 58.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.46% |
| Values | Daily Returns |
AVITA Medical vs. Citic Telecom International
Performance |
| Timeline |
| AVITA Medical |
| Citic Telecom Intern |
AVITA Medical and Citic Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AVITA Medical and Citic Telecom
The main advantage of trading using opposite AVITA Medical and Citic Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVITA Medical 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.| AVITA Medical vs. Apple Inc | AVITA Medical vs. Apple Inc | AVITA Medical vs. Apple Inc | AVITA Medical vs. Apple Inc |
| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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