Correlation Between CITIC Telecom and HSBC Holdings
Can any of the company-specific risk be diversified away by investing in both CITIC Telecom and HSBC Holdings 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 HSBC Holdings 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 HSBC Holdings plc, you can compare the effects of market volatilities on CITIC Telecom and HSBC Holdings 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 HSBC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC Telecom and HSBC Holdings.
Diversification Opportunities for CITIC Telecom and HSBC Holdings
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CITIC and HSBC is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Telecom International and HSBC Holdings plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC Holdings plc 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 HSBC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HSBC Holdings plc has no effect on the direction of CITIC Telecom i.e., CITIC Telecom and HSBC Holdings go up and down completely randomly.
Pair Corralation between CITIC Telecom and HSBC Holdings
Assuming the 90 days horizon CITIC Telecom is expected to generate 5.33 times less return on investment than HSBC Holdings. In addition to that, CITIC Telecom is 3.35 times more volatile than HSBC Holdings plc. It trades about 0.02 of its total potential returns per unit of risk. HSBC Holdings plc is currently generating about 0.31 per unit of volatility. If you would invest 911.00 in HSBC Holdings plc on October 8, 2024 and sell it today you would earn a total of 50.00 from holding HSBC Holdings plc or generate 5.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CITIC Telecom International vs. HSBC Holdings plc
Performance |
| Timeline |
| CITIC Telecom Intern |
| HSBC Holdings plc |
CITIC Telecom and HSBC Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITIC Telecom and HSBC Holdings
The main advantage of trading using opposite CITIC Telecom and HSBC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIC Telecom position performs unexpectedly, HSBC Holdings 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 HSBC Holdings will offset losses from the drop in HSBC Holdings' long position.| CITIC Telecom vs. Nippon Telegraph and | CITIC Telecom vs. Superior Plus Corp | CITIC Telecom vs. NMI Holdings | CITIC Telecom vs. SIVERS SEMICONDUCTORS AB |
| HSBC Holdings vs. Take Two Interactive Software | HSBC Holdings vs. FRACTAL GAMING GROUP | HSBC Holdings vs. MACOM Technology Solutions | HSBC Holdings vs. Vishay Intertechnology |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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