Correlation Between Citic Telecom and Arrow Electronics
Can any of the company-specific risk be diversified away by investing in both Citic Telecom and Arrow Electronics 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 Arrow Electronics 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 Arrow Electronics, you can compare the effects of market volatilities on Citic Telecom and Arrow Electronics 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 Arrow Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Telecom and Arrow Electronics.
Diversification Opportunities for Citic Telecom and Arrow Electronics
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citic and Arrow is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Citic Telecom International and Arrow Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Electronics 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 Arrow Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Electronics has no effect on the direction of Citic Telecom i.e., Citic Telecom and Arrow Electronics go up and down completely randomly.
Pair Corralation between Citic Telecom and Arrow Electronics
Assuming the 90 days trading horizon Citic Telecom International is expected to generate 4.59 times more return on investment than Arrow Electronics. However, Citic Telecom is 4.59 times more volatile than Arrow Electronics. It trades about 0.07 of its potential returns per unit of risk. Arrow Electronics is currently generating about 0.02 per unit of risk. If you would invest 3.96 in Citic Telecom International on September 3, 2024 and sell it today you would earn a total of 23.04 from holding Citic Telecom International or generate 581.82% 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. Arrow Electronics
Performance |
| Timeline |
| Citic Telecom Intern |
| Arrow Electronics |
Citic Telecom and Arrow Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citic Telecom and Arrow Electronics
The main advantage of trading using opposite Citic Telecom and Arrow Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Telecom position performs unexpectedly, Arrow Electronics 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 Arrow Electronics will offset losses from the drop in Arrow Electronics' long position.| Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc |
| Arrow Electronics vs. KAGA EL LTD | Arrow Electronics vs. Wayside Technology Group | Arrow Electronics vs. INNELEC MULTIMMINHEO153 |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |