Correlation Between Citic Telecom and NEWELL RUBBERMAID
Can any of the company-specific risk be diversified away by investing in both Citic Telecom and NEWELL RUBBERMAID 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 NEWELL RUBBERMAID 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 NEWELL RUBBERMAID , you can compare the effects of market volatilities on Citic Telecom and NEWELL RUBBERMAID 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 NEWELL RUBBERMAID. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Telecom and NEWELL RUBBERMAID.
Diversification Opportunities for Citic Telecom and NEWELL RUBBERMAID
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citic and NEWELL is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Citic Telecom International and NEWELL RUBBERMAID in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEWELL RUBBERMAID 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 NEWELL RUBBERMAID. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEWELL RUBBERMAID has no effect on the direction of Citic Telecom i.e., Citic Telecom and NEWELL RUBBERMAID go up and down completely randomly.
Pair Corralation between Citic Telecom and NEWELL RUBBERMAID
Assuming the 90 days trading horizon Citic Telecom International is expected to generate 2.19 times more return on investment than NEWELL RUBBERMAID. However, Citic Telecom is 2.19 times more volatile than NEWELL RUBBERMAID . It trades about 0.07 of its potential returns per unit of risk. NEWELL RUBBERMAID is currently generating about 0.06 per unit of risk. If you would invest 11.00 in Citic Telecom International on September 14, 2024 and sell it today you would earn a total of 16.00 from holding Citic Telecom International or generate 145.45% 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. NEWELL RUBBERMAID
Performance |
| Timeline |
| Citic Telecom Intern |
| NEWELL RUBBERMAID |
Citic Telecom and NEWELL RUBBERMAID Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citic Telecom and NEWELL RUBBERMAID
The main advantage of trading using opposite Citic Telecom and NEWELL RUBBERMAID positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Telecom position performs unexpectedly, NEWELL RUBBERMAID 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 NEWELL RUBBERMAID will offset losses from the drop in NEWELL RUBBERMAID's long position.| Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc |
| NEWELL RUBBERMAID vs. Apple Inc | NEWELL RUBBERMAID vs. Apple Inc | NEWELL RUBBERMAID vs. Apple Inc | NEWELL RUBBERMAID vs. Apple Inc |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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