Correlation Between Citic Telecom and UTD OV
Can any of the company-specific risk be diversified away by investing in both Citic Telecom and UTD OV 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 UTD OV 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 UTD OV BK LOC ADR1, you can compare the effects of market volatilities on Citic Telecom and UTD OV 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 UTD OV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Telecom and UTD OV.
Diversification Opportunities for Citic Telecom and UTD OV
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citic and UTD is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Citic Telecom International and UTD OV BK LOC ADR1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UTD OV BK 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 UTD OV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UTD OV BK has no effect on the direction of Citic Telecom i.e., Citic Telecom and UTD OV go up and down completely randomly.
Pair Corralation between Citic Telecom and UTD OV
Assuming the 90 days trading horizon Citic Telecom International is expected to generate 6.3 times more return on investment than UTD OV. However, Citic Telecom is 6.3 times more volatile than UTD OV BK LOC ADR1. It trades about 0.07 of its potential returns per unit of risk. UTD OV BK LOC ADR1 is currently generating about 0.1 per unit of risk. If you would invest 9.10 in Citic Telecom International on September 12, 2024 and sell it today you would earn a total of 17.90 from holding Citic Telecom International or generate 196.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citic Telecom International vs. UTD OV BK LOC ADR1
Performance |
| Timeline |
| Citic Telecom Intern |
| UTD OV BK |
Citic Telecom and UTD OV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citic Telecom and UTD OV
The main advantage of trading using opposite Citic Telecom and UTD OV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Telecom position performs unexpectedly, UTD OV 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 UTD OV will offset losses from the drop in UTD OV's long position.| Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc |
| UTD OV vs. Shenandoah Telecommunications | UTD OV vs. Citic Telecom International | UTD OV vs. Zoom Video Communications | UTD OV vs. The Boston Beer |
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 Stocks Directory module to find actively traded stocks across global markets.
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