Correlation Between CIFI Holdings and Citic Telecom
Can any of the company-specific risk be diversified away by investing in both CIFI Holdings 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 CIFI Holdings and Citic Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CIFI Holdings Co and Citic Telecom International, you can compare the effects of market volatilities on CIFI Holdings 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 CIFI Holdings with a short position of Citic Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIFI Holdings and Citic Telecom.
Diversification Opportunities for CIFI Holdings and Citic Telecom
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CIFI and Citic is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding CIFI Holdings Co 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 CIFI Holdings 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 CIFI Holdings Co 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 CIFI Holdings i.e., CIFI Holdings and Citic Telecom go up and down completely randomly.
Pair Corralation between CIFI Holdings and Citic Telecom
Assuming the 90 days horizon CIFI Holdings is expected to generate 1.62 times less return on investment than Citic Telecom. In addition to that, CIFI Holdings is 1.0 times more volatile than Citic Telecom International. It trades about 0.04 of its total potential returns per unit of risk. Citic Telecom International is currently generating about 0.07 per unit of volatility. If you would invest 11.00 in Citic Telecom International on September 14, 2024 and sell it today you would earn a total of 16.00 from holding Citic Telecom International or generate 145.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CIFI Holdings Co vs. Citic Telecom International
Performance |
| Timeline |
| CIFI Holdings |
| Citic Telecom Intern |
CIFI Holdings and Citic Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIFI Holdings and Citic Telecom
The main advantage of trading using opposite CIFI Holdings and Citic Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIFI Holdings 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.| CIFI Holdings vs. GEELY AUTOMOBILE | CIFI Holdings vs. North American Construction | CIFI Holdings vs. TITAN MACHINERY | CIFI Holdings vs. Chongqing Machinery Electric |
| 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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