Correlation Between CITIC Telecom and BII Railway
Can any of the company-specific risk be diversified away by investing in both CITIC Telecom and BII Railway 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 BII Railway 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 BII Railway Transportation, you can compare the effects of market volatilities on CITIC Telecom and BII Railway 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 BII Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC Telecom and BII Railway.
Diversification Opportunities for CITIC Telecom and BII Railway
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CITIC and BII is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Telecom International and BII Railway Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BII Railway Transpor 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 BII Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BII Railway Transpor has no effect on the direction of CITIC Telecom i.e., CITIC Telecom and BII Railway go up and down completely randomly.
Pair Corralation between CITIC Telecom and BII Railway
Assuming the 90 days horizon CITIC Telecom International is expected to under-perform the BII Railway. In addition to that, CITIC Telecom is 1.22 times more volatile than BII Railway Transportation. It trades about -0.09 of its total potential returns per unit of risk. BII Railway Transportation is currently generating about -0.05 per unit of volatility. If you would invest 2.85 in BII Railway Transportation on November 4, 2024 and sell it today you would lose (0.05) from holding BII Railway Transportation or give up 1.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
CITIC Telecom International vs. BII Railway Transportation
Performance |
| Timeline |
| CITIC Telecom Intern |
| BII Railway Transpor |
CITIC Telecom and BII Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITIC Telecom and BII Railway
The main advantage of trading using opposite CITIC Telecom and BII Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIC Telecom position performs unexpectedly, BII Railway 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 BII Railway will offset losses from the drop in BII Railway's long position.| CITIC Telecom vs. National Beverage Corp | CITIC Telecom vs. Planet Fitness | CITIC Telecom vs. Molina Healthcare | CITIC Telecom vs. The Boston Beer |
| BII Railway vs. UNIVERSAL DISPLAY | BII Railway vs. Suntory Beverage Food | BII Railway vs. UNITED UTILITIES GR | BII Railway vs. PLAYTIKA HOLDING DL 01 |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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