Correlation Between Citic Telecom and SCANDMEDICAL SOLDK-040
Can any of the company-specific risk be diversified away by investing in both Citic Telecom and SCANDMEDICAL SOLDK-040 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 SCANDMEDICAL SOLDK-040 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 SCANDMEDICAL SOLDK 040, you can compare the effects of market volatilities on Citic Telecom and SCANDMEDICAL SOLDK-040 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 SCANDMEDICAL SOLDK-040. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Telecom and SCANDMEDICAL SOLDK-040.
Diversification Opportunities for Citic Telecom and SCANDMEDICAL SOLDK-040
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citic and SCANDMEDICAL is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Citic Telecom International and SCANDMEDICAL SOLDK 040 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCANDMEDICAL SOLDK 040 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 SCANDMEDICAL SOLDK-040. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCANDMEDICAL SOLDK 040 has no effect on the direction of Citic Telecom i.e., Citic Telecom and SCANDMEDICAL SOLDK-040 go up and down completely randomly.
Pair Corralation between Citic Telecom and SCANDMEDICAL SOLDK-040
Assuming the 90 days trading horizon Citic Telecom is expected to generate 14.47 times less return on investment than SCANDMEDICAL SOLDK-040. But when comparing it to its historical volatility, Citic Telecom International is 1.74 times less risky than SCANDMEDICAL SOLDK-040. It trades about 0.01 of its potential returns per unit of risk. SCANDMEDICAL SOLDK 040 is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 74.00 in SCANDMEDICAL SOLDK 040 on September 1, 2024 and sell it today you would earn a total of 5.00 from holding SCANDMEDICAL SOLDK 040 or generate 6.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citic Telecom International vs. SCANDMEDICAL SOLDK 040
Performance |
| Timeline |
| Citic Telecom Intern |
| SCANDMEDICAL SOLDK 040 |
Citic Telecom and SCANDMEDICAL SOLDK-040 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citic Telecom and SCANDMEDICAL SOLDK-040
The main advantage of trading using opposite Citic Telecom and SCANDMEDICAL SOLDK-040 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Telecom position performs unexpectedly, SCANDMEDICAL SOLDK-040 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 SCANDMEDICAL SOLDK-040 will offset losses from the drop in SCANDMEDICAL SOLDK-040's long position.| Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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