Correlation Between Citic Telecom and SL Green
Can any of the company-specific risk be diversified away by investing in both Citic Telecom and SL Green 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 SL Green 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 SL Green Realty, you can compare the effects of market volatilities on Citic Telecom and SL Green 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 SL Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Telecom and SL Green.
Diversification Opportunities for Citic Telecom and SL Green
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citic and GEI is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Citic Telecom International and SL Green Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SL Green Realty 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 SL Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SL Green Realty has no effect on the direction of Citic Telecom i.e., Citic Telecom and SL Green go up and down completely randomly.
Pair Corralation between Citic Telecom and SL Green
Assuming the 90 days trading horizon Citic Telecom International is expected to generate 3.89 times more return on investment than SL Green. However, Citic Telecom is 3.89 times more volatile than SL Green Realty. It trades about 0.07 of its potential returns per unit of risk. SL Green Realty is currently generating about 0.13 per unit of risk. If you would invest 11.00 in Citic Telecom International on September 2, 2024 and sell it today you would earn a total of 15.00 from holding Citic Telecom International or generate 136.36% 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. SL Green Realty
Performance |
| Timeline |
| Citic Telecom Intern |
| SL Green Realty |
Citic Telecom and SL Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citic Telecom and SL Green
The main advantage of trading using opposite Citic Telecom and SL Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Telecom position performs unexpectedly, SL Green 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 SL Green will offset losses from the drop in SL Green's long position.| Citic Telecom vs. X Fab Silicon | Citic Telecom vs. Silicon Motion Technology | Citic Telecom vs. MACOM Technology Solutions | Citic Telecom vs. Micron Technology |
| SL Green vs. SYSTEMAIR AB | SL Green vs. Citic Telecom International | SL Green vs. Enter Air SA | SL Green vs. Rogers Communications |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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