Correlation Between China World and China Telecom
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By analyzing existing cross correlation between China World Trade and China Telecom Corp, you can compare the effects of market volatilities on China World and China 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 China World with a short position of China Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of China World and China Telecom.
Diversification Opportunities for China World and China Telecom
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between China and China is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding China World Trade and China Telecom Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Telecom Corp and China World 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 China World Trade are associated (or correlated) with China Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Telecom Corp has no effect on the direction of China World i.e., China World and China Telecom go up and down completely randomly.
Pair Corralation between China World and China Telecom
Assuming the 90 days trading horizon China World Trade is expected to generate 0.77 times more return on investment than China Telecom. However, China World Trade is 1.3 times less risky than China Telecom. It trades about 0.13 of its potential returns per unit of risk. China Telecom Corp is currently generating about 0.08 per unit of risk. If you would invest 2,245 in China World Trade on September 12, 2024 and sell it today you would earn a total of 92.00 from holding China World Trade or generate 4.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China World Trade vs. China Telecom Corp
Performance |
| Timeline |
| China World Trade |
| China Telecom Corp |
China World and China Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China World and China Telecom
The main advantage of trading using opposite China World and China Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China World position performs unexpectedly, China 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 China Telecom will offset losses from the drop in China Telecom's long position.| China World vs. Industrial and Commercial | China World vs. China Construction Bank | China World vs. Bank of China | China World vs. Agricultural Bank of |
| China Telecom vs. Guangdong Brandmax Marketing | China Telecom vs. Olympic Circuit Technology | China Telecom vs. Industrial Bank Co | China Telecom vs. China World Trade |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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