Correlation Between Citic Telecom and Teradata Corp
Can any of the company-specific risk be diversified away by investing in both Citic Telecom and Teradata Corp 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 Teradata Corp 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 Teradata Corp, you can compare the effects of market volatilities on Citic Telecom and Teradata Corp 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 Teradata Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Telecom and Teradata Corp.
Diversification Opportunities for Citic Telecom and Teradata Corp
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Citic and Teradata is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Citic Telecom International and Teradata Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teradata Corp 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 Teradata Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teradata Corp has no effect on the direction of Citic Telecom i.e., Citic Telecom and Teradata Corp go up and down completely randomly.
Pair Corralation between Citic Telecom and Teradata Corp
Assuming the 90 days trading horizon Citic Telecom International is expected to under-perform the Teradata Corp. In addition to that, Citic Telecom is 2.23 times more volatile than Teradata Corp. It trades about -0.05 of its total potential returns per unit of risk. Teradata Corp is currently generating about 0.01 per unit of volatility. If you would invest 3,060 in Teradata Corp on October 28, 2024 and sell it today you would earn a total of 0.00 from holding Teradata Corp or generate 0.0% 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. Teradata Corp
Performance |
| Timeline |
| Citic Telecom Intern |
| Teradata Corp |
Citic Telecom and Teradata Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citic Telecom and Teradata Corp
The main advantage of trading using opposite Citic Telecom and Teradata Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Telecom position performs unexpectedly, Teradata Corp 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 Teradata Corp will offset losses from the drop in Teradata Corp's long position.| Citic Telecom vs. Keck Seng Investments | Citic Telecom vs. ECHO INVESTMENT ZY | Citic Telecom vs. Japan Asia Investment | Citic Telecom vs. DFS Furniture PLC |
| Teradata Corp vs. NetApp Inc | Teradata Corp vs. Pure Storage | Teradata Corp vs. NEXTDC LTD | Teradata Corp vs. SEIKOH GIKEN Co |
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 CEOs Directory module to screen CEOs from public companies around the world.
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