Correlation Between Citic Telecom and COMBA TELECOM
Can any of the company-specific risk be diversified away by investing in both Citic Telecom and COMBA TELECOM 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 COMBA TELECOM 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 COMBA TELECOM SYST, you can compare the effects of market volatilities on Citic Telecom and COMBA TELECOM 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 COMBA TELECOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Telecom and COMBA TELECOM.
Diversification Opportunities for Citic Telecom and COMBA TELECOM
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citic and COMBA is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Citic Telecom International and COMBA TELECOM SYST in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMBA TELECOM SYST 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 COMBA TELECOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMBA TELECOM SYST has no effect on the direction of Citic Telecom i.e., Citic Telecom and COMBA TELECOM go up and down completely randomly.
Pair Corralation between Citic Telecom and COMBA TELECOM
Assuming the 90 days trading horizon Citic Telecom is expected to generate 2.83 times less return on investment than COMBA TELECOM. But when comparing it to its historical volatility, Citic Telecom International is 1.22 times less risky than COMBA TELECOM. It trades about 0.16 of its potential returns per unit of risk. COMBA TELECOM SYST is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 13.00 in COMBA TELECOM SYST on November 28, 2024 and sell it today you would earn a total of 5.00 from holding COMBA TELECOM SYST or generate 38.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citic Telecom International vs. COMBA TELECOM SYST
Performance |
| Timeline |
| Citic Telecom Intern |
| COMBA TELECOM SYST |
Citic Telecom and COMBA TELECOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citic Telecom and COMBA TELECOM
The main advantage of trading using opposite Citic Telecom and COMBA TELECOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Telecom position performs unexpectedly, COMBA TELECOM 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 COMBA TELECOM will offset losses from the drop in COMBA TELECOM's long position.| Citic Telecom vs. COSMOSTEEL HLDGS | Citic Telecom vs. ANGANG STEEL H | Citic Telecom vs. Veolia Environnement SA | Citic Telecom vs. Samsung Electronics Co |
| COMBA TELECOM vs. AGNC Investment Corp | COMBA TELECOM vs. SLR Investment Corp | COMBA TELECOM vs. Carsales | COMBA TELECOM vs. CODERE ONLINE LUX |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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