Correlation Between Industrial and China Telecom
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By analyzing existing cross correlation between Industrial and Commercial and China Telecom Corp, you can compare the effects of market volatilities on Industrial 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 Industrial with a short position of China Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial and China Telecom.
Diversification Opportunities for Industrial and China Telecom
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Industrial and China is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Industrial and Commercial 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 Industrial 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 Industrial and Commercial 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 Industrial i.e., Industrial and China Telecom go up and down completely randomly.
Pair Corralation between Industrial and China Telecom
Assuming the 90 days trading horizon Industrial and Commercial is expected to under-perform the China Telecom. But the stock apears to be less risky and, when comparing its historical volatility, Industrial and Commercial is 2.05 times less risky than China Telecom. The stock trades about -0.08 of its potential returns per unit of risk. The China Telecom Corp is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 650.00 in China Telecom Corp on August 25, 2024 and sell it today you would lose (8.00) from holding China Telecom Corp or give up 1.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial and Commercial vs. China Telecom Corp
Performance |
| Timeline |
| Industrial and Commercial |
| China Telecom Corp |
Industrial and China Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial and China Telecom
The main advantage of trading using opposite Industrial and China Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial 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.| Industrial vs. Anhui Huilong Agricultural | Industrial vs. Agricultural Bank of | Industrial vs. Masterwork Machinery | Industrial vs. Huitong Construction Group |
| China Telecom vs. Kunwu Jiuding Investment | China Telecom vs. Fiberhome Telecommunication Technologies | China Telecom vs. Jointo Energy Investment | China Telecom vs. Peoples Insurance of |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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