Correlation Between CITIC Telecom and INSURANCE AUST
Can any of the company-specific risk be diversified away by investing in both CITIC Telecom and INSURANCE AUST 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 INSURANCE AUST 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 INSURANCE AUST GRP, you can compare the effects of market volatilities on CITIC Telecom and INSURANCE AUST 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 INSURANCE AUST. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC Telecom and INSURANCE AUST.
Diversification Opportunities for CITIC Telecom and INSURANCE AUST
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CITIC and INSURANCE is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Telecom International and INSURANCE AUST GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INSURANCE AUST GRP 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 INSURANCE AUST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INSURANCE AUST GRP has no effect on the direction of CITIC Telecom i.e., CITIC Telecom and INSURANCE AUST go up and down completely randomly.
Pair Corralation between CITIC Telecom and INSURANCE AUST
Assuming the 90 days horizon CITIC Telecom International is expected to under-perform the INSURANCE AUST. In addition to that, CITIC Telecom is 1.63 times more volatile than INSURANCE AUST GRP. It trades about -0.1 of its total potential returns per unit of risk. INSURANCE AUST GRP is currently generating about 0.18 per unit of volatility. If you would invest 505.00 in INSURANCE AUST GRP on October 25, 2024 and sell it today you would earn a total of 20.00 from holding INSURANCE AUST GRP or generate 3.96% 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. INSURANCE AUST GRP
Performance |
| Timeline |
| CITIC Telecom Intern |
| INSURANCE AUST GRP |
CITIC Telecom and INSURANCE AUST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITIC Telecom and INSURANCE AUST
The main advantage of trading using opposite CITIC Telecom and INSURANCE AUST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIC Telecom position performs unexpectedly, INSURANCE AUST 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 INSURANCE AUST will offset losses from the drop in INSURANCE AUST's long position.| CITIC Telecom vs. GRUPO CARSO A1 | CITIC Telecom vs. REMEDY ENTERTAINMENT OYJ | CITIC Telecom vs. Grupo Carso SAB | CITIC Telecom vs. ANTA SPORTS PRODUCT |
| INSURANCE AUST vs. Teradata Corp | INSURANCE AUST vs. Retail Estates NV | INSURANCE AUST vs. CN DATANG C | INSURANCE AUST vs. SILVER BULLET DATA |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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