Correlation Between China Telecom and Yantai North
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By analyzing existing cross correlation between China Telecom Corp and Yantai North Andre, you can compare the effects of market volatilities on China Telecom and Yantai North 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 Telecom with a short position of Yantai North. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Telecom and Yantai North.
Diversification Opportunities for China Telecom and Yantai North
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Yantai is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding China Telecom Corp and Yantai North Andre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yantai North Andre and China Telecom 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 Telecom Corp are associated (or correlated) with Yantai North. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yantai North Andre has no effect on the direction of China Telecom i.e., China Telecom and Yantai North go up and down completely randomly.
Pair Corralation between China Telecom and Yantai North
Assuming the 90 days trading horizon China Telecom is expected to generate 4.08 times less return on investment than Yantai North. But when comparing it to its historical volatility, China Telecom Corp is 2.04 times less risky than Yantai North. It trades about 0.03 of its potential returns per unit of risk. Yantai North Andre is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,753 in Yantai North Andre on August 31, 2024 and sell it today you would earn a total of 1,176 from holding Yantai North Andre or generate 67.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
China Telecom Corp vs. Yantai North Andre
Performance |
| Timeline |
| China Telecom Corp |
| Yantai North Andre |
China Telecom and Yantai North Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Telecom and Yantai North
The main advantage of trading using opposite China Telecom and Yantai North positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Telecom position performs unexpectedly, Yantai North 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 Yantai North will offset losses from the drop in Yantai North's long position.| China Telecom vs. BYD Co Ltd | China Telecom vs. Agricultural Bank of | China Telecom vs. Industrial and Commercial | China Telecom vs. China State Construction |
| Yantai North vs. Lutian Machinery Co | Yantai North vs. PetroChina Co Ltd | Yantai North vs. Bank of China | Yantai North vs. Gansu Jiu Steel |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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