Correlation Between CITIC Telecom and HUTCHISON TELECOMM
Can any of the company-specific risk be diversified away by investing in both CITIC Telecom and HUTCHISON TELECOMM 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 HUTCHISON TELECOMM 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 HUTCHISON TELECOMM, you can compare the effects of market volatilities on CITIC Telecom and HUTCHISON TELECOMM 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 HUTCHISON TELECOMM. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC Telecom and HUTCHISON TELECOMM.
Diversification Opportunities for CITIC Telecom and HUTCHISON TELECOMM
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CITIC and HUTCHISON is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Telecom International and HUTCHISON TELECOMM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUTCHISON TELECOMM 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 HUTCHISON TELECOMM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUTCHISON TELECOMM has no effect on the direction of CITIC Telecom i.e., CITIC Telecom and HUTCHISON TELECOMM go up and down completely randomly.
Pair Corralation between CITIC Telecom and HUTCHISON TELECOMM
Assuming the 90 days horizon CITIC Telecom International is expected to under-perform the HUTCHISON TELECOMM. But the stock apears to be less risky and, when comparing its historical volatility, CITIC Telecom International is 1.97 times less risky than HUTCHISON TELECOMM. The stock trades about -0.02 of its potential returns per unit of risk. The HUTCHISON TELECOMM is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1.40 in HUTCHISON TELECOMM on November 3, 2024 and sell it today you would earn a total of 0.00 from holding HUTCHISON TELECOMM or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CITIC Telecom International vs. HUTCHISON TELECOMM
Performance |
| Timeline |
| CITIC Telecom Intern |
| HUTCHISON TELECOMM |
CITIC Telecom and HUTCHISON TELECOMM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITIC Telecom and HUTCHISON TELECOMM
The main advantage of trading using opposite CITIC Telecom and HUTCHISON TELECOMM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIC Telecom position performs unexpectedly, HUTCHISON TELECOMM 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 HUTCHISON TELECOMM will offset losses from the drop in HUTCHISON TELECOMM's long position.| CITIC Telecom vs. EIDESVIK OFFSHORE NK | CITIC Telecom vs. BW OFFSHORE LTD | CITIC Telecom vs. ANGLO ASIAN MINING | CITIC Telecom vs. INSURANCE AUST GRP |
| HUTCHISON TELECOMM vs. Apple Inc | HUTCHISON TELECOMM vs. Apple Inc | HUTCHISON TELECOMM vs. Apple Inc | HUTCHISON TELECOMM vs. Apple Inc |
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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