Correlation Between Citic Telecom and BE Semiconductor
Can any of the company-specific risk be diversified away by investing in both Citic Telecom and BE 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 BE 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 BE Semiconductor Industries, you can compare the effects of market volatilities on Citic Telecom and BE 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 BE Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Telecom and BE Semiconductor.
Diversification Opportunities for Citic Telecom and BE Semiconductor
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citic and BSI is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Citic Telecom International and BE Semiconductor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BE Semiconductor Ind 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 BE Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BE Semiconductor Ind has no effect on the direction of Citic Telecom i.e., Citic Telecom and BE Semiconductor go up and down completely randomly.
Pair Corralation between Citic Telecom and BE Semiconductor
Assuming the 90 days trading horizon Citic Telecom International is expected to generate 2.54 times more return on investment than BE Semiconductor. However, Citic Telecom is 2.54 times more volatile than BE Semiconductor Industries. It trades about 0.07 of its potential returns per unit of risk. BE Semiconductor Industries is currently generating about 0.06 per unit of risk. If you would invest 3.99 in Citic Telecom International on August 24, 2024 and sell it today you would earn a total of 23.01 from holding Citic Telecom International or generate 576.69% 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. BE Semiconductor Industries
Performance |
| Timeline |
| Citic Telecom Intern |
| BE Semiconductor Ind |
Citic Telecom and BE Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citic Telecom and BE Semiconductor
The main advantage of trading using opposite Citic Telecom and BE Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Telecom position performs unexpectedly, BE 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 BE Semiconductor will offset losses from the drop in BE Semiconductor's long position.| Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc |
| BE Semiconductor vs. AIR LIQUIDE ADR | BE Semiconductor vs. Wizz Air Holdings | BE Semiconductor vs. PICKN PAY STORES | BE Semiconductor vs. WIZZ AIR HLDGUNSPADR4 |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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