Correlation Between Citic Telecom and Reliance Steel
Can any of the company-specific risk be diversified away by investing in both Citic Telecom and Reliance Steel 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 Reliance Steel 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 Reliance Steel Aluminum, you can compare the effects of market volatilities on Citic Telecom and Reliance Steel 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 Reliance Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Telecom and Reliance Steel.
Diversification Opportunities for Citic Telecom and Reliance Steel
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Citic and Reliance is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Citic Telecom International and Reliance Steel Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reliance Steel Aluminum 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 Reliance Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reliance Steel Aluminum has no effect on the direction of Citic Telecom i.e., Citic Telecom and Reliance Steel go up and down completely randomly.
Pair Corralation between Citic Telecom and Reliance Steel
Assuming the 90 days trading horizon Citic Telecom International is expected to generate 4.3 times more return on investment than Reliance Steel. However, Citic Telecom is 4.3 times more volatile than Reliance Steel Aluminum. It trades about 0.07 of its potential returns per unit of risk. Reliance Steel Aluminum is currently generating about 0.04 per unit of risk. If you would invest 4.04 in Citic Telecom International on October 16, 2024 and sell it today you would earn a total of 22.96 from holding Citic Telecom International or generate 568.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citic Telecom International vs. Reliance Steel Aluminum
Performance |
| Timeline |
| Citic Telecom Intern |
| Reliance Steel Aluminum |
Citic Telecom and Reliance Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citic Telecom and Reliance Steel
The main advantage of trading using opposite Citic Telecom and Reliance Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Telecom position performs unexpectedly, Reliance Steel 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 Reliance Steel will offset losses from the drop in Reliance Steel's long position.| Citic Telecom vs. CARSALESCOM | Citic Telecom vs. MAG SILVER | Citic Telecom vs. MUTUIONLINE | Citic Telecom vs. Eurasia Mining Plc |
| Reliance Steel vs. Aya Gold Silver | Reliance Steel vs. CHINA SOUTHN AIR H | Reliance Steel vs. Altair Engineering | Reliance Steel vs. SOGECLAIR SA INH |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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