Correlation Between CITIC Telecom and Oriental Land
Can any of the company-specific risk be diversified away by investing in both CITIC Telecom and Oriental Land 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 Oriental Land 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 Oriental Land Co, you can compare the effects of market volatilities on CITIC Telecom and Oriental Land 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 Oriental Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC Telecom and Oriental Land.
Diversification Opportunities for CITIC Telecom and Oriental Land
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CITIC and Oriental is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Telecom International and Oriental Land Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Land 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 Oriental Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Land has no effect on the direction of CITIC Telecom i.e., CITIC Telecom and Oriental Land go up and down completely randomly.
Pair Corralation between CITIC Telecom and Oriental Land
Assuming the 90 days horizon CITIC Telecom International is expected to generate 1.8 times more return on investment than Oriental Land. However, CITIC Telecom is 1.8 times more volatile than Oriental Land Co. It trades about 0.04 of its potential returns per unit of risk. Oriental Land Co is currently generating about -0.05 per unit of risk. If you would invest 26.00 in CITIC Telecom International on October 24, 2024 and sell it today you would earn a total of 1.00 from holding CITIC Telecom International or generate 3.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CITIC Telecom International vs. Oriental Land Co
Performance |
| Timeline |
| CITIC Telecom Intern |
| Oriental Land |
CITIC Telecom and Oriental Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITIC Telecom and Oriental Land
The main advantage of trading using opposite CITIC Telecom and Oriental Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIC Telecom position performs unexpectedly, Oriental Land 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 Oriental Land will offset losses from the drop in Oriental Land's long position.| CITIC Telecom vs. Tencent Music Entertainment | CITIC Telecom vs. SOGECLAIR SA INH | CITIC Telecom vs. ALTAIR RES INC | CITIC Telecom vs. Alaska Air Group |
| Oriental Land vs. CITIC Telecom International | Oriental Land vs. SIEM OFFSHORE NEW | Oriental Land vs. EIDESVIK OFFSHORE NK | Oriental Land vs. Singapore Telecommunications Limited |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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