Correlation Between CITIC Telecom and DIVIDEND GROWTH
Can any of the company-specific risk be diversified away by investing in both CITIC Telecom and DIVIDEND GROWTH 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 DIVIDEND GROWTH 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 DIVIDEND GROWTH SPLIT, you can compare the effects of market volatilities on CITIC Telecom and DIVIDEND GROWTH 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 DIVIDEND GROWTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC Telecom and DIVIDEND GROWTH.
Diversification Opportunities for CITIC Telecom and DIVIDEND GROWTH
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CITIC and DIVIDEND is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Telecom International and DIVIDEND GROWTH SPLIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIVIDEND GROWTH SPLIT 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 DIVIDEND GROWTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIVIDEND GROWTH SPLIT has no effect on the direction of CITIC Telecom i.e., CITIC Telecom and DIVIDEND GROWTH go up and down completely randomly.
Pair Corralation between CITIC Telecom and DIVIDEND GROWTH
Assuming the 90 days horizon CITIC Telecom International is expected to generate 2.61 times more return on investment than DIVIDEND GROWTH. However, CITIC Telecom is 2.61 times more volatile than DIVIDEND GROWTH SPLIT. It trades about 0.07 of its potential returns per unit of risk. DIVIDEND GROWTH SPLIT is currently generating about 0.07 per unit of risk. If you would invest 8.69 in CITIC Telecom International on September 12, 2024 and sell it today you would earn a total of 18.31 from holding CITIC Telecom International or generate 210.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CITIC Telecom International vs. DIVIDEND GROWTH SPLIT
Performance |
| Timeline |
| CITIC Telecom Intern |
| DIVIDEND GROWTH SPLIT |
CITIC Telecom and DIVIDEND GROWTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITIC Telecom and DIVIDEND GROWTH
The main advantage of trading using opposite CITIC Telecom and DIVIDEND GROWTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIC Telecom position performs unexpectedly, DIVIDEND GROWTH 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 DIVIDEND GROWTH will offset losses from the drop in DIVIDEND GROWTH's long position.| CITIC Telecom vs. Superior Plus Corp | CITIC Telecom vs. SIVERS SEMICONDUCTORS AB | CITIC Telecom vs. Norsk Hydro ASA | CITIC Telecom vs. Reliance Steel Aluminum |
| DIVIDEND GROWTH vs. CITIC Telecom International | DIVIDEND GROWTH vs. AWILCO DRILLING PLC | DIVIDEND GROWTH vs. Spirent Communications plc | DIVIDEND GROWTH vs. Pembina Pipeline Corp |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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