Correlation Between Citic Telecom and TOREX SEMICONDUCTOR
Can any of the company-specific risk be diversified away by investing in both Citic Telecom and TOREX SEMICONDUCTOR 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 TOREX SEMICONDUCTOR 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 TOREX SEMICONDUCTOR LTD, you can compare the effects of market volatilities on Citic Telecom and TOREX SEMICONDUCTOR 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 TOREX SEMICONDUCTOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Telecom and TOREX SEMICONDUCTOR.
Diversification Opportunities for Citic Telecom and TOREX SEMICONDUCTOR
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citic and TOREX is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Citic Telecom International and TOREX SEMICONDUCTOR LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOREX SEMICONDUCTOR LTD 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 TOREX SEMICONDUCTOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOREX SEMICONDUCTOR LTD has no effect on the direction of Citic Telecom i.e., Citic Telecom and TOREX SEMICONDUCTOR go up and down completely randomly.
Pair Corralation between Citic Telecom and TOREX SEMICONDUCTOR
Assuming the 90 days trading horizon Citic Telecom International is expected to generate 1.02 times more return on investment than TOREX SEMICONDUCTOR. However, Citic Telecom is 1.02 times more volatile than TOREX SEMICONDUCTOR LTD. It trades about 0.09 of its potential returns per unit of risk. TOREX SEMICONDUCTOR LTD is currently generating about -0.21 per unit of risk. If you would invest 26.00 in Citic Telecom International on August 30, 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. TOREX SEMICONDUCTOR LTD
Performance |
| Timeline |
| Citic Telecom Intern |
| TOREX SEMICONDUCTOR LTD |
Citic Telecom and TOREX SEMICONDUCTOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citic Telecom and TOREX SEMICONDUCTOR
The main advantage of trading using opposite Citic Telecom and TOREX SEMICONDUCTOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Telecom position performs unexpectedly, TOREX SEMICONDUCTOR 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 TOREX SEMICONDUCTOR will offset losses from the drop in TOREX SEMICONDUCTOR's long position.| Citic Telecom vs. AUSTEVOLL SEAFOOD | Citic Telecom vs. CVW CLEANTECH INC | Citic Telecom vs. Performance Food Group | Citic Telecom vs. CAREER EDUCATION |
| TOREX SEMICONDUCTOR vs. Texas Instruments Incorporated | TOREX SEMICONDUCTOR vs. Advanced Micro Devices | TOREX SEMICONDUCTOR vs. Advanced Micro Devices | TOREX SEMICONDUCTOR vs. Intel |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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