Correlation Between CITIC Telecom and GAMESTOP
Can any of the company-specific risk be diversified away by investing in both CITIC Telecom and GAMESTOP 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 GAMESTOP 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 GAMESTOP, you can compare the effects of market volatilities on CITIC Telecom and GAMESTOP 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 GAMESTOP. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC Telecom and GAMESTOP.
Diversification Opportunities for CITIC Telecom and GAMESTOP
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CITIC and GAMESTOP is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Telecom International and GAMESTOP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMESTOP 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 GAMESTOP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMESTOP has no effect on the direction of CITIC Telecom i.e., CITIC Telecom and GAMESTOP go up and down completely randomly.
Pair Corralation between CITIC Telecom and GAMESTOP
Assuming the 90 days horizon CITIC Telecom International is expected to generate 0.79 times more return on investment than GAMESTOP. However, CITIC Telecom International is 1.27 times less risky than GAMESTOP. It trades about 0.08 of its potential returns per unit of risk. GAMESTOP is currently generating about -0.31 per unit of risk. If you would invest 27.00 in CITIC Telecom International on November 7, 2024 and sell it today you would earn a total of 1.00 from holding CITIC Telecom International or generate 3.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
CITIC Telecom International vs. GAMESTOP
Performance |
| Timeline |
| CITIC Telecom Intern |
| GAMESTOP |
CITIC Telecom and GAMESTOP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITIC Telecom and GAMESTOP
The main advantage of trading using opposite CITIC Telecom and GAMESTOP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIC Telecom position performs unexpectedly, GAMESTOP 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 GAMESTOP will offset losses from the drop in GAMESTOP's long position.| CITIC Telecom vs. Merit Medical Systems | CITIC Telecom vs. China Medical System | CITIC Telecom vs. CarsalesCom | CITIC Telecom vs. INTER CARS SA |
| GAMESTOP vs. Direct Line Insurance | GAMESTOP vs. Zijin Mining Group | GAMESTOP vs. ADRIATIC METALS LS 013355 | GAMESTOP vs. SBI Insurance 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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