Correlation Between Citic Telecom and MTR
Can any of the company-specific risk be diversified away by investing in both Citic Telecom and MTR 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 MTR 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 MTR Limited, you can compare the effects of market volatilities on Citic Telecom and MTR 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 MTR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Telecom and MTR.
Diversification Opportunities for Citic Telecom and MTR
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citic and MTR is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Citic Telecom International and MTR Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTR Limited 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 MTR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTR Limited has no effect on the direction of Citic Telecom i.e., Citic Telecom and MTR go up and down completely randomly.
Pair Corralation between Citic Telecom and MTR
Assuming the 90 days trading horizon Citic Telecom International is expected to generate 1.92 times more return on investment than MTR. However, Citic Telecom is 1.92 times more volatile than MTR Limited. It trades about 0.01 of its potential returns per unit of risk. MTR Limited is currently generating about -0.22 per unit of risk. If you would invest 26.00 in Citic Telecom International on October 29, 2024 and sell it today you would earn a total of 0.00 from holding Citic Telecom International or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citic Telecom International vs. MTR Limited
Performance |
| Timeline |
| Citic Telecom Intern |
| MTR Limited |
Citic Telecom and MTR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citic Telecom and MTR
The main advantage of trading using opposite Citic Telecom and MTR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Telecom position performs unexpectedly, MTR 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 MTR will offset losses from the drop in MTR's long position.| Citic Telecom vs. Silicon Motion Technology | Citic Telecom vs. KINGBOARD CHEMICAL | Citic Telecom vs. Sumitomo Rubber Industries | Citic Telecom vs. Materialise NV |
| MTR vs. Cleanaway Waste Management | MTR vs. LANDSEA GREEN MANAGEMENT | MTR vs. TAL Education Group | MTR vs. G8 EDUCATION |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |