Correlation Between Citic Telecom and DexCom
Can any of the company-specific risk be diversified away by investing in both Citic Telecom and DexCom 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 DexCom 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 DexCom Inc, you can compare the effects of market volatilities on Citic Telecom and DexCom 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 DexCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Telecom and DexCom.
Diversification Opportunities for Citic Telecom and DexCom
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Citic and DexCom is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Citic Telecom International and DexCom Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DexCom Inc 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 DexCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DexCom Inc has no effect on the direction of Citic Telecom i.e., Citic Telecom and DexCom go up and down completely randomly.
Pair Corralation between Citic Telecom and DexCom
Assuming the 90 days trading horizon Citic Telecom International is expected to generate 2.57 times more return on investment than DexCom. However, Citic Telecom is 2.57 times more volatile than DexCom Inc. It trades about 0.07 of its potential returns per unit of risk. DexCom Inc is currently generating about -0.01 per unit of risk. If you would invest 4.01 in Citic Telecom International on September 1, 2024 and sell it today you would earn a total of 21.99 from holding Citic Telecom International or generate 548.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Citic Telecom International vs. DexCom Inc
Performance |
| Timeline |
| Citic Telecom Intern |
| DexCom Inc |
Citic Telecom and DexCom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citic Telecom and DexCom
The main advantage of trading using opposite Citic Telecom and DexCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Telecom position performs unexpectedly, DexCom 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 DexCom will offset losses from the drop in DexCom's long position.| Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc |
| DexCom vs. SK TELECOM TDADR | DexCom vs. Citic Telecom International | DexCom vs. Selective Insurance Group | DexCom vs. Universal Insurance Holdings |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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