Correlation Between Citic Telecom and Hexcel
Can any of the company-specific risk be diversified away by investing in both Citic Telecom and Hexcel 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 Hexcel 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 Hexcel, you can compare the effects of market volatilities on Citic Telecom and Hexcel 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 Hexcel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Telecom and Hexcel.
Diversification Opportunities for Citic Telecom and Hexcel
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citic and Hexcel is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Citic Telecom International and Hexcel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hexcel 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 Hexcel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hexcel has no effect on the direction of Citic Telecom i.e., Citic Telecom and Hexcel go up and down completely randomly.
Pair Corralation between Citic Telecom and Hexcel
Assuming the 90 days trading horizon Citic Telecom is expected to generate 12.51 times less return on investment than Hexcel. In addition to that, Citic Telecom is 1.32 times more volatile than Hexcel. It trades about 0.01 of its total potential returns per unit of risk. Hexcel is currently generating about 0.16 per unit of volatility. If you would invest 5,750 in Hexcel on September 14, 2024 and sell it today you would earn a total of 300.00 from holding Hexcel or generate 5.22% 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. Hexcel
Performance |
| Timeline |
| Citic Telecom Intern |
| Hexcel |
Citic Telecom and Hexcel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citic Telecom and Hexcel
The main advantage of trading using opposite Citic Telecom and Hexcel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Telecom position performs unexpectedly, Hexcel 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 Hexcel will offset losses from the drop in Hexcel's long position.| Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc |
| Hexcel vs. Align Technology | Hexcel vs. Micron Technology | Hexcel vs. Vishay Intertechnology | Hexcel vs. PLAYSTUDIOS A DL 0001 |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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