Correlation Between CITIC Telecom and TriMas
Can any of the company-specific risk be diversified away by investing in both CITIC Telecom and TriMas 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 TriMas 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 TriMas, you can compare the effects of market volatilities on CITIC Telecom and TriMas 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 TriMas. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC Telecom and TriMas.
Diversification Opportunities for CITIC Telecom and TriMas
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between CITIC and TriMas is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Telecom International and TriMas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TriMas 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 TriMas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TriMas has no effect on the direction of CITIC Telecom i.e., CITIC Telecom and TriMas go up and down completely randomly.
Pair Corralation between CITIC Telecom and TriMas
Assuming the 90 days horizon CITIC Telecom International is expected to under-perform the TriMas. But the stock apears to be less risky and, when comparing its historical volatility, CITIC Telecom International is 2.62 times less risky than TriMas. The stock trades about -0.09 of its potential returns per unit of risk. The TriMas is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,100 in TriMas on November 4, 2024 and sell it today you would earn a total of 220.00 from holding TriMas or generate 10.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
CITIC Telecom International vs. TriMas
Performance |
| Timeline |
| CITIC Telecom Intern |
| TriMas |
CITIC Telecom and TriMas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITIC Telecom and TriMas
The main advantage of trading using opposite CITIC Telecom and TriMas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIC Telecom position performs unexpectedly, TriMas 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 TriMas will offset losses from the drop in TriMas' long position.| CITIC Telecom vs. National Beverage Corp | CITIC Telecom vs. Planet Fitness | CITIC Telecom vs. Molina Healthcare | CITIC Telecom vs. The Boston Beer |
| TriMas vs. Compugroup Medical SE | TriMas vs. Inspire Medical Systems | TriMas vs. Peijia Medical Limited | TriMas vs. Apollo Medical Holdings |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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