Correlation Between Citic Telecom and Caseys General
Can any of the company-specific risk be diversified away by investing in both Citic Telecom and Caseys General 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 Caseys General 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 Caseys General Stores, you can compare the effects of market volatilities on Citic Telecom and Caseys General 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 Caseys General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Telecom and Caseys General.
Diversification Opportunities for Citic Telecom and Caseys General
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Citic and Caseys is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Citic Telecom International and Caseys General Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caseys General Stores 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 Caseys General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caseys General Stores has no effect on the direction of Citic Telecom i.e., Citic Telecom and Caseys General go up and down completely randomly.
Pair Corralation between Citic Telecom and Caseys General
Assuming the 90 days trading horizon Citic Telecom is expected to generate 1.28 times less return on investment than Caseys General. In addition to that, Citic Telecom is 2.03 times more volatile than Caseys General Stores. It trades about 0.03 of its total potential returns per unit of risk. Caseys General Stores is currently generating about 0.09 per unit of volatility. If you would invest 25,417 in Caseys General Stores on December 3, 2024 and sell it today you would earn a total of 13,383 from holding Caseys General Stores or generate 52.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citic Telecom International vs. Caseys General Stores
Performance |
| Timeline |
| Citic Telecom Intern |
| Caseys General Stores |
Citic Telecom and Caseys General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citic Telecom and Caseys General
The main advantage of trading using opposite Citic Telecom and Caseys General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Telecom position performs unexpectedly, Caseys General 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 Caseys General will offset losses from the drop in Caseys General's long position.| Citic Telecom vs. Selective Insurance Group | ||
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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