Correlation Between DIVIDEND GROWTH and CITIC Telecom
Can any of the company-specific risk be diversified away by investing in both DIVIDEND GROWTH 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 DIVIDEND GROWTH and CITIC Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DIVIDEND GROWTH SPLIT and CITIC Telecom International, you can compare the effects of market volatilities on DIVIDEND GROWTH 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 DIVIDEND GROWTH with a short position of CITIC Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of DIVIDEND GROWTH and CITIC Telecom.
Diversification Opportunities for DIVIDEND GROWTH and CITIC Telecom
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DIVIDEND and CITIC is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding DIVIDEND GROWTH SPLIT 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 DIVIDEND GROWTH 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 DIVIDEND GROWTH SPLIT 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 DIVIDEND GROWTH i.e., DIVIDEND GROWTH and CITIC Telecom go up and down completely randomly.
Pair Corralation between DIVIDEND GROWTH and CITIC Telecom
Assuming the 90 days horizon DIVIDEND GROWTH SPLIT is expected to generate 1.17 times more return on investment than CITIC Telecom. However, DIVIDEND GROWTH is 1.17 times more volatile than CITIC Telecom International. It trades about 0.07 of its potential returns per unit of risk. CITIC Telecom International is currently generating about 0.08 per unit of risk. If you would invest 457.00 in DIVIDEND GROWTH SPLIT on September 13, 2024 and sell it today you would earn a total of 17.00 from holding DIVIDEND GROWTH SPLIT or generate 3.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DIVIDEND GROWTH SPLIT vs. CITIC Telecom International
Performance |
| Timeline |
| DIVIDEND GROWTH SPLIT |
| CITIC Telecom Intern |
DIVIDEND GROWTH and CITIC Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DIVIDEND GROWTH and CITIC Telecom
The main advantage of trading using opposite DIVIDEND GROWTH and CITIC Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DIVIDEND GROWTH 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.| DIVIDEND GROWTH vs. Apple Inc | DIVIDEND GROWTH vs. Apple Inc | DIVIDEND GROWTH vs. Apple Inc | DIVIDEND GROWTH vs. Apple Inc |
| CITIC Telecom vs. Superior Plus Corp | CITIC Telecom vs. SIVERS SEMICONDUCTORS AB | CITIC Telecom vs. Norsk Hydro ASA | CITIC Telecom vs. Reliance Steel Aluminum |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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