Correlation Between CITIC Telecom and GRUPO CARSO-A1
Can any of the company-specific risk be diversified away by investing in both CITIC Telecom and GRUPO CARSO-A1 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 CITIC Telecom and GRUPO CARSO-A1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CITIC Telecom International and GRUPO CARSO A1, you can compare the effects of market volatilities on CITIC Telecom and GRUPO CARSO-A1 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 CITIC Telecom with a short position of GRUPO CARSO-A1. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC Telecom and GRUPO CARSO-A1.
Diversification Opportunities for CITIC Telecom and GRUPO CARSO-A1
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CITIC and GRUPO is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Telecom International and GRUPO CARSO A1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRUPO CARSO A1 and CITIC 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 CITIC Telecom International are associated (or correlated) with GRUPO CARSO-A1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRUPO CARSO A1 has no effect on the direction of CITIC Telecom i.e., CITIC Telecom and GRUPO CARSO-A1 go up and down completely randomly.
Pair Corralation between CITIC Telecom and GRUPO CARSO-A1
Assuming the 90 days horizon CITIC Telecom is expected to generate 20.62 times less return on investment than GRUPO CARSO-A1. In addition to that, CITIC Telecom is 1.4 times more volatile than GRUPO CARSO A1. It trades about 0.01 of its total potential returns per unit of risk. GRUPO CARSO A1 is currently generating about 0.26 per unit of volatility. If you would invest 510.00 in GRUPO CARSO A1 on October 23, 2024 and sell it today you would earn a total of 30.00 from holding GRUPO CARSO A1 or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CITIC Telecom International vs. GRUPO CARSO A1
Performance |
| Timeline |
| CITIC Telecom Intern |
| GRUPO CARSO A1 |
CITIC Telecom and GRUPO CARSO-A1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITIC Telecom and GRUPO CARSO-A1
The main advantage of trading using opposite CITIC Telecom and GRUPO CARSO-A1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIC Telecom position performs unexpectedly, GRUPO CARSO-A1 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 GRUPO CARSO-A1 will offset losses from the drop in GRUPO CARSO-A1's long position.| CITIC Telecom vs. ADDUS HOMECARE | CITIC Telecom vs. Coor Service Management | CITIC Telecom vs. Hisense Home Appliances | CITIC Telecom vs. Q2M Managementberatung AG |
| GRUPO CARSO-A1 vs. CITIC Telecom International | GRUPO CARSO-A1 vs. Entravision Communications | GRUPO CARSO-A1 vs. Chunghwa Telecom Co | GRUPO CARSO-A1 vs. Zijin Mining Group |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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