Correlation Between DAIDO METAL and Citic Telecom
Can any of the company-specific risk be diversified away by investing in both DAIDO METAL 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 DAIDO METAL and Citic Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DAIDO METAL TD and Citic Telecom International, you can compare the effects of market volatilities on DAIDO METAL 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 DAIDO METAL with a short position of Citic Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAIDO METAL and Citic Telecom.
Diversification Opportunities for DAIDO METAL and Citic Telecom
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DAIDO and Citic is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding DAIDO METAL TD 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 DAIDO METAL 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 DAIDO METAL TD 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 DAIDO METAL i.e., DAIDO METAL and Citic Telecom go up and down completely randomly.
Pair Corralation between DAIDO METAL and Citic Telecom
Assuming the 90 days horizon DAIDO METAL TD is expected to under-perform the Citic Telecom. But the stock apears to be less risky and, when comparing its historical volatility, DAIDO METAL TD is 4.0 times less risky than Citic Telecom. The stock trades about -0.02 of its potential returns per unit of risk. The Citic Telecom International is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Citic Telecom International on October 29, 2024 and sell it today you would earn a total of 16.00 from holding Citic Telecom International or generate 160.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAIDO METAL TD vs. Citic Telecom International
Performance |
| Timeline |
| DAIDO METAL TD |
| Citic Telecom Intern |
DAIDO METAL and Citic Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DAIDO METAL and Citic Telecom
The main advantage of trading using opposite DAIDO METAL and Citic Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAIDO METAL 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.| DAIDO METAL vs. Dalata Hotel Group | DAIDO METAL vs. Delta Electronics Public | DAIDO METAL vs. Sunstone Hotel Investors | DAIDO METAL vs. Methode Electronics |
| Citic Telecom vs. Silicon Motion Technology | Citic Telecom vs. KINGBOARD CHEMICAL | Citic Telecom vs. Sumitomo Rubber Industries | Citic Telecom vs. Materialise NV |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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