Correlation Between CITIC Telecom and Lattice Semiconductor
Can any of the company-specific risk be diversified away by investing in both CITIC Telecom and Lattice Semiconductor 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 Lattice Semiconductor 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 Lattice Semiconductor, you can compare the effects of market volatilities on CITIC Telecom and Lattice Semiconductor 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 Lattice Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC Telecom and Lattice Semiconductor.
Diversification Opportunities for CITIC Telecom and Lattice Semiconductor
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CITIC and Lattice is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Telecom International and Lattice Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lattice Semiconductor 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 Lattice Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lattice Semiconductor has no effect on the direction of CITIC Telecom i.e., CITIC Telecom and Lattice Semiconductor go up and down completely randomly.
Pair Corralation between CITIC Telecom and Lattice Semiconductor
Assuming the 90 days horizon CITIC Telecom International is expected to generate 0.97 times more return on investment than Lattice Semiconductor. However, CITIC Telecom International is 1.03 times less risky than Lattice Semiconductor. It trades about 0.03 of its potential returns per unit of risk. Lattice Semiconductor is currently generating about 0.0 per unit of risk. If you would invest 24.00 in CITIC Telecom International on December 13, 2024 and sell it today you would earn a total of 4.00 from holding CITIC Telecom International or generate 16.67% 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. Lattice Semiconductor
Performance |
| Timeline |
| CITIC Telecom Intern |
| Lattice Semiconductor |
CITIC Telecom and Lattice Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITIC Telecom and Lattice Semiconductor
The main advantage of trading using opposite CITIC Telecom and Lattice Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIC Telecom position performs unexpectedly, Lattice Semiconductor 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 Lattice Semiconductor will offset losses from the drop in Lattice Semiconductor's long position.| CITIC Telecom vs. Ringmetall SE | ||
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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