Correlation Between Citic Telecom and COPAUR MINERALS
Can any of the company-specific risk be diversified away by investing in both Citic Telecom and COPAUR MINERALS 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 COPAUR MINERALS 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 COPAUR MINERALS INC, you can compare the effects of market volatilities on Citic Telecom and COPAUR MINERALS 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 COPAUR MINERALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Telecom and COPAUR MINERALS.
Diversification Opportunities for Citic Telecom and COPAUR MINERALS
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Citic and COPAUR is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Citic Telecom International and COPAUR MINERALS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COPAUR MINERALS INC 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 COPAUR MINERALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COPAUR MINERALS INC has no effect on the direction of Citic Telecom i.e., Citic Telecom and COPAUR MINERALS go up and down completely randomly.
Pair Corralation between Citic Telecom and COPAUR MINERALS
Assuming the 90 days trading horizon Citic Telecom is expected to generate 9.32 times less return on investment than COPAUR MINERALS. But when comparing it to its historical volatility, Citic Telecom International is 2.12 times less risky than COPAUR MINERALS. It trades about 0.07 of its potential returns per unit of risk. COPAUR MINERALS INC is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 6.86 in COPAUR MINERALS INC on November 4, 2024 and sell it today you would earn a total of 3.08 from holding COPAUR MINERALS INC or generate 44.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citic Telecom International vs. COPAUR MINERALS INC
Performance |
| Timeline |
| Citic Telecom Intern |
| COPAUR MINERALS INC |
Citic Telecom and COPAUR MINERALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citic Telecom and COPAUR MINERALS
The main advantage of trading using opposite Citic Telecom and COPAUR MINERALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Telecom position performs unexpectedly, COPAUR MINERALS 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 COPAUR MINERALS will offset losses from the drop in COPAUR MINERALS's long position.| Citic Telecom vs. PLAYTIKA HOLDING DL 01 | Citic Telecom vs. GALENA MINING LTD | Citic Telecom vs. TRAVEL LEISURE DL 01 | Citic Telecom vs. ARISTOCRAT LEISURE |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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