Correlation Between CITIC Telecom and ASPEN TECHINC
Can any of the company-specific risk be diversified away by investing in both CITIC Telecom and ASPEN TECHINC 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 ASPEN TECHINC 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 ASPEN TECHINC DL, you can compare the effects of market volatilities on CITIC Telecom and ASPEN TECHINC 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 ASPEN TECHINC. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC Telecom and ASPEN TECHINC.
Diversification Opportunities for CITIC Telecom and ASPEN TECHINC
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between CITIC and ASPEN is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Telecom International and ASPEN TECHINC DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASPEN TECHINC DL 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 ASPEN TECHINC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASPEN TECHINC DL has no effect on the direction of CITIC Telecom i.e., CITIC Telecom and ASPEN TECHINC go up and down completely randomly.
Pair Corralation between CITIC Telecom and ASPEN TECHINC
Assuming the 90 days horizon CITIC Telecom International is expected to under-perform the ASPEN TECHINC. In addition to that, CITIC Telecom is 3.19 times more volatile than ASPEN TECHINC DL. It trades about -0.02 of its total potential returns per unit of risk. ASPEN TECHINC DL is currently generating about 0.23 per unit of volatility. If you would invest 23,200 in ASPEN TECHINC DL on November 3, 2024 and sell it today you would earn a total of 1,800 from holding ASPEN TECHINC DL or generate 7.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CITIC Telecom International vs. ASPEN TECHINC DL
Performance |
| Timeline |
| CITIC Telecom Intern |
| ASPEN TECHINC DL |
CITIC Telecom and ASPEN TECHINC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITIC Telecom and ASPEN TECHINC
The main advantage of trading using opposite CITIC Telecom and ASPEN TECHINC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIC Telecom position performs unexpectedly, ASPEN TECHINC 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 ASPEN TECHINC will offset losses from the drop in ASPEN TECHINC's long position.| CITIC Telecom vs. EIDESVIK OFFSHORE NK | CITIC Telecom vs. BW OFFSHORE LTD | CITIC Telecom vs. ANGLO ASIAN MINING | CITIC Telecom vs. INSURANCE AUST GRP |
| ASPEN TECHINC vs. AWILCO DRILLING PLC | ASPEN TECHINC vs. Cars Inc | ASPEN TECHINC vs. CARSALESCOM | ASPEN TECHINC vs. Motorcar Parts of |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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