Correlation Between Citic Telecom and Strategic Education
Can any of the company-specific risk be diversified away by investing in both Citic Telecom and Strategic 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 Strategic 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 Strategic Education, you can compare the effects of market volatilities on Citic Telecom and Strategic 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 Strategic Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Telecom and Strategic Education.
Diversification Opportunities for Citic Telecom and Strategic Education
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Citic and Strategic is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Citic Telecom International and Strategic Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic 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 Strategic Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Education has no effect on the direction of Citic Telecom i.e., Citic Telecom and Strategic Education go up and down completely randomly.
Pair Corralation between Citic Telecom and Strategic Education
Assuming the 90 days trading horizon Citic Telecom is expected to generate 31.82 times less return on investment than Strategic Education. But when comparing it to its historical volatility, Citic Telecom International is 1.52 times less risky than Strategic Education. It trades about 0.01 of its potential returns per unit of risk. Strategic Education is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 7,900 in Strategic Education on September 2, 2024 and sell it today you would earn a total of 1,450 from holding Strategic Education or generate 18.35% 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. Strategic Education
Performance |
| Timeline |
| Citic Telecom Intern |
| Strategic Education |
Citic Telecom and Strategic Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citic Telecom and Strategic Education
The main advantage of trading using opposite Citic Telecom and Strategic Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Telecom position performs unexpectedly, Strategic 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 Strategic Education will offset losses from the drop in Strategic Education's long position.| Citic Telecom vs. X Fab Silicon | Citic Telecom vs. Silicon Motion Technology | Citic Telecom vs. MACOM Technology Solutions | Citic Telecom vs. Micron Technology |
| Strategic Education vs. Superior Plus Corp | Strategic Education vs. NMI Holdings | Strategic Education vs. Origin Agritech | Strategic Education vs. SIVERS SEMICONDUCTORS AB |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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