Correlation Between Citic Telecom and Compagnie Plastic
Can any of the company-specific risk be diversified away by investing in both Citic Telecom and Compagnie Plastic 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 Compagnie Plastic 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 Compagnie Plastic Omnium, you can compare the effects of market volatilities on Citic Telecom and Compagnie Plastic 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 Compagnie Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Telecom and Compagnie Plastic.
Diversification Opportunities for Citic Telecom and Compagnie Plastic
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Citic and Compagnie is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Citic Telecom International and Compagnie Plastic Omnium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Plastic Omnium 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 Compagnie Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Plastic Omnium has no effect on the direction of Citic Telecom i.e., Citic Telecom and Compagnie Plastic go up and down completely randomly.
Pair Corralation between Citic Telecom and Compagnie Plastic
Assuming the 90 days trading horizon Citic Telecom International is expected to generate 0.85 times more return on investment than Compagnie Plastic. However, Citic Telecom International is 1.18 times less risky than Compagnie Plastic. It trades about 0.09 of its potential returns per unit of risk. Compagnie Plastic Omnium is currently generating about -0.17 per unit of risk. If you would invest 26.00 in Citic Telecom International on August 27, 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citic Telecom International vs. Compagnie Plastic Omnium
Performance |
| Timeline |
| Citic Telecom Intern |
| Compagnie Plastic Omnium |
Citic Telecom and Compagnie Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citic Telecom and Compagnie Plastic
The main advantage of trading using opposite Citic Telecom and Compagnie Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Telecom position performs unexpectedly, Compagnie Plastic 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 Compagnie Plastic will offset losses from the drop in Compagnie Plastic's long position.| Citic Telecom vs. UNIVMUSIC GRPADR050 | Citic Telecom vs. Pembina Pipeline Corp | Citic Telecom vs. INFORMATION SVC GRP | Citic Telecom vs. PLAY2CHILL SA ZY |
| Compagnie Plastic vs. Astral Foods Limited | Compagnie Plastic vs. Haier Smart Home | Compagnie Plastic vs. AUSTEVOLL SEAFOOD | Compagnie Plastic vs. SENECA FOODS A |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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