Correlation Between CITIC Telecom and Apple
Can any of the company-specific risk be diversified away by investing in both CITIC Telecom and Apple 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 Apple 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 Apple Inc, you can compare the effects of market volatilities on CITIC Telecom and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC Telecom and Apple.
Diversification Opportunities for CITIC Telecom and Apple
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CITIC and Apple is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Telecom International and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of CITIC Telecom i.e., CITIC Telecom and Apple go up and down completely randomly.
Pair Corralation between CITIC Telecom and Apple
Assuming the 90 days horizon CITIC Telecom International is expected to generate 5.54 times more return on investment than Apple. However, CITIC Telecom is 5.54 times more volatile than Apple Inc. It trades about 0.08 of its potential returns per unit of risk. Apple Inc is currently generating about 0.1 per unit of risk. If you would invest 3.94 in CITIC Telecom International on September 23, 2024 and sell it today you would earn a total of 25.06 from holding CITIC Telecom International or generate 636.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CITIC Telecom International vs. Apple Inc
Performance |
| Timeline |
| CITIC Telecom Intern |
| Apple Inc |
CITIC Telecom and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITIC Telecom and Apple
The main advantage of trading using opposite CITIC Telecom and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIC Telecom position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| CITIC Telecom vs. T Mobile | CITIC Telecom vs. China Mobile Limited | CITIC Telecom vs. Verizon Communications | CITIC Telecom vs. ATT Inc |
| Apple vs. CITIC Telecom International | Apple vs. Consolidated Communications Holdings | Apple vs. Ribbon Communications | Apple vs. INTERSHOP Communications Aktiengesellschaft |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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