Correlation Between Citic Telecom and Transurban
Can any of the company-specific risk be diversified away by investing in both Citic Telecom and Transurban 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 Transurban 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 Transurban Group, you can compare the effects of market volatilities on Citic Telecom and Transurban 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 Transurban. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Telecom and Transurban.
Diversification Opportunities for Citic Telecom and Transurban
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citic and Transurban is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Citic Telecom International and Transurban Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transurban Group 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 Transurban. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transurban Group has no effect on the direction of Citic Telecom i.e., Citic Telecom and Transurban go up and down completely randomly.
Pair Corralation between Citic Telecom and Transurban
Assuming the 90 days trading horizon Citic Telecom is expected to generate 7.19 times less return on investment than Transurban. In addition to that, Citic Telecom is 1.89 times more volatile than Transurban Group. It trades about 0.01 of its total potential returns per unit of risk. Transurban Group is currently generating about 0.15 per unit of volatility. If you would invest 748.00 in Transurban Group on September 2, 2024 and sell it today you would earn a total of 30.00 from holding Transurban Group or generate 4.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citic Telecom International vs. Transurban Group
Performance |
| Timeline |
| Citic Telecom Intern |
| Transurban Group |
Citic Telecom and Transurban Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citic Telecom and Transurban
The main advantage of trading using opposite Citic Telecom and Transurban positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Telecom position performs unexpectedly, Transurban 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 Transurban will offset losses from the drop in Transurban'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 |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |