Correlation Between Citic Telecom and Computer
Can any of the company-specific risk be diversified away by investing in both Citic Telecom and Computer 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 Computer 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 Computer And Technologies, you can compare the effects of market volatilities on Citic Telecom and Computer 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 Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Telecom and Computer.
Diversification Opportunities for Citic Telecom and Computer
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citic and Computer is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Citic Telecom International and Computer And Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer And Technologies 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 Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer And Technologies has no effect on the direction of Citic Telecom i.e., Citic Telecom and Computer go up and down completely randomly.
Pair Corralation between Citic Telecom and Computer
Assuming the 90 days trading horizon Citic Telecom International is expected to generate 0.97 times more return on investment than Computer. However, Citic Telecom International is 1.03 times less risky than Computer. It trades about 0.08 of its potential returns per unit of risk. Computer And Technologies is currently generating about -0.08 per unit of risk. If you would invest 26.00 in Citic Telecom International on September 5, 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 | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Citic Telecom International vs. Computer And Technologies
Performance |
| Timeline |
| Citic Telecom Intern |
| Computer And Technologies |
Citic Telecom and Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citic Telecom and Computer
The main advantage of trading using opposite Citic Telecom and Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Telecom position performs unexpectedly, Computer 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 Computer will offset losses from the drop in Computer's long position.| Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc |
| Computer vs. FUJITSU LTD ADR | Computer vs. Superior Plus Corp | Computer vs. NMI Holdings | Computer vs. Origin Agritech |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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