Correlation Between Citic Telecom and STRAYER EDUCATION
Can any of the company-specific risk be diversified away by investing in both Citic Telecom and STRAYER EDUCATION 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 STRAYER EDUCATION 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 STRAYER EDUCATION, you can compare the effects of market volatilities on Citic Telecom and STRAYER EDUCATION 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 STRAYER EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Telecom and STRAYER EDUCATION.
Diversification Opportunities for Citic Telecom and STRAYER EDUCATION
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Citic and STRAYER is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Citic Telecom International and STRAYER EDUCATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRAYER EDUCATION 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 STRAYER EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STRAYER EDUCATION has no effect on the direction of Citic Telecom i.e., Citic Telecom and STRAYER EDUCATION go up and down completely randomly.
Pair Corralation between Citic Telecom and STRAYER EDUCATION
Assuming the 90 days trading horizon Citic Telecom International is expected to generate 1.77 times more return on investment than STRAYER EDUCATION. However, Citic Telecom is 1.77 times more volatile than STRAYER EDUCATION. It trades about 0.09 of its potential returns per unit of risk. STRAYER EDUCATION is currently generating about 0.13 per unit of risk. If you would invest 26.00 in Citic Telecom International on September 13, 2024 and sell it today you would earn a total of 1.00 from holding Citic Telecom International or generate 3.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citic Telecom International vs. STRAYER EDUCATION
Performance |
| Timeline |
| Citic Telecom Intern |
| STRAYER EDUCATION |
Citic Telecom and STRAYER EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citic Telecom and STRAYER EDUCATION
The main advantage of trading using opposite Citic Telecom and STRAYER EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Telecom position performs unexpectedly, STRAYER EDUCATION 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 STRAYER EDUCATION will offset losses from the drop in STRAYER EDUCATION's long position.| Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc |
| STRAYER EDUCATION vs. Apple Inc | STRAYER EDUCATION vs. Apple Inc | STRAYER EDUCATION vs. Apple Inc | STRAYER EDUCATION 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.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |