Correlation Between CITIC Telecom and CDN IMPERIAL
Can any of the company-specific risk be diversified away by investing in both CITIC Telecom and CDN IMPERIAL 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 CDN IMPERIAL 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 CDN IMPERIAL BANK, you can compare the effects of market volatilities on CITIC Telecom and CDN IMPERIAL 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 CDN IMPERIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC Telecom and CDN IMPERIAL.
Diversification Opportunities for CITIC Telecom and CDN IMPERIAL
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CITIC and CDN is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Telecom International and CDN IMPERIAL BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDN IMPERIAL BANK 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 CDN IMPERIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDN IMPERIAL BANK has no effect on the direction of CITIC Telecom i.e., CITIC Telecom and CDN IMPERIAL go up and down completely randomly.
Pair Corralation between CITIC Telecom and CDN IMPERIAL
Assuming the 90 days horizon CITIC Telecom International is expected to generate 6.48 times more return on investment than CDN IMPERIAL. However, CITIC Telecom is 6.48 times more volatile than CDN IMPERIAL BANK. It trades about 0.07 of its potential returns per unit of risk. CDN IMPERIAL BANK is currently generating about 0.09 per unit of risk. If you would invest 4.12 in CITIC Telecom International on October 26, 2024 and sell it today you would earn a total of 21.88 from holding CITIC Telecom International or generate 531.07% 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. CDN IMPERIAL BANK
Performance |
| Timeline |
| CITIC Telecom Intern |
| CDN IMPERIAL BANK |
CITIC Telecom and CDN IMPERIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITIC Telecom and CDN IMPERIAL
The main advantage of trading using opposite CITIC Telecom and CDN IMPERIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIC Telecom position performs unexpectedly, CDN IMPERIAL 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 CDN IMPERIAL will offset losses from the drop in CDN IMPERIAL's long position.| CITIC Telecom vs. T Mobile | CITIC Telecom vs. China Mobile Limited | CITIC Telecom vs. Verizon Communications | CITIC Telecom vs. ATT Inc |
| CDN IMPERIAL vs. Corporate Travel Management | CDN IMPERIAL vs. Brockhaus Capital Management | CDN IMPERIAL vs. Japan Tobacco | CDN IMPERIAL vs. Sixt Leasing SE |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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