Correlation Between Citic Telecom and Thai Beverage
Can any of the company-specific risk be diversified away by investing in both Citic Telecom and Thai Beverage 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 Thai Beverage 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 Thai Beverage Public, you can compare the effects of market volatilities on Citic Telecom and Thai Beverage 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 Thai Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Telecom and Thai Beverage.
Diversification Opportunities for Citic Telecom and Thai Beverage
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Citic and Thai is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Citic Telecom International and Thai Beverage Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Beverage Public 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 Thai Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Beverage Public has no effect on the direction of Citic Telecom i.e., Citic Telecom and Thai Beverage go up and down completely randomly.
Pair Corralation between Citic Telecom and Thai Beverage
Assuming the 90 days trading horizon Citic Telecom International is expected to generate 1.42 times more return on investment than Thai Beverage. However, Citic Telecom is 1.42 times more volatile than Thai Beverage Public. It trades about 0.04 of its potential returns per unit of risk. Thai Beverage Public is currently generating about 0.05 per unit of risk. If you would invest 23.00 in Citic Telecom International on September 1, 2024 and sell it today you would earn a total of 3.00 from holding Citic Telecom International or generate 13.04% 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. Thai Beverage Public
Performance |
| Timeline |
| Citic Telecom Intern |
| Thai Beverage Public |
Citic Telecom and Thai Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citic Telecom and Thai Beverage
The main advantage of trading using opposite Citic Telecom and Thai Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Telecom position performs unexpectedly, Thai Beverage 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 Thai Beverage will offset losses from the drop in Thai Beverage's long position.| Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc | Citic Telecom 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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