Correlation Between CITIC Telecom and TEXAS ROADHOUSE
Can any of the company-specific risk be diversified away by investing in both CITIC Telecom and TEXAS ROADHOUSE 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 TEXAS ROADHOUSE 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 TEXAS ROADHOUSE, you can compare the effects of market volatilities on CITIC Telecom and TEXAS ROADHOUSE 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 TEXAS ROADHOUSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC Telecom and TEXAS ROADHOUSE.
Diversification Opportunities for CITIC Telecom and TEXAS ROADHOUSE
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CITIC and TEXAS is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Telecom International and TEXAS ROADHOUSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TEXAS ROADHOUSE 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 TEXAS ROADHOUSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TEXAS ROADHOUSE has no effect on the direction of CITIC Telecom i.e., CITIC Telecom and TEXAS ROADHOUSE go up and down completely randomly.
Pair Corralation between CITIC Telecom and TEXAS ROADHOUSE
Assuming the 90 days horizon CITIC Telecom International is expected to generate 5.08 times more return on investment than TEXAS ROADHOUSE. However, CITIC Telecom is 5.08 times more volatile than TEXAS ROADHOUSE. It trades about 0.07 of its potential returns per unit of risk. TEXAS ROADHOUSE is currently generating about 0.1 per unit of risk. If you would invest 4.01 in CITIC Telecom International on October 13, 2024 and sell it today you would earn a total of 22.99 from holding CITIC Telecom International or generate 573.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
CITIC Telecom International vs. TEXAS ROADHOUSE
Performance |
| Timeline |
| CITIC Telecom Intern |
| TEXAS ROADHOUSE |
CITIC Telecom and TEXAS ROADHOUSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITIC Telecom and TEXAS ROADHOUSE
The main advantage of trading using opposite CITIC Telecom and TEXAS ROADHOUSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIC Telecom position performs unexpectedly, TEXAS ROADHOUSE 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 TEXAS ROADHOUSE will offset losses from the drop in TEXAS ROADHOUSE's long position.| CITIC Telecom vs. Heidelberg Materials AG | CITIC Telecom vs. Summit Materials | CITIC Telecom vs. Pebblebrook Hotel Trust | CITIC Telecom vs. PPHE HOTEL GROUP |
| TEXAS ROADHOUSE vs. CITIC Telecom International | TEXAS ROADHOUSE vs. Alliance Data Systems | TEXAS ROADHOUSE vs. Iridium Communications | TEXAS ROADHOUSE vs. Cairo Communication SpA |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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