Correlation Between Citic Telecom and Vishay Intertechnology
Can any of the company-specific risk be diversified away by investing in both Citic Telecom and Vishay Intertechnology 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 Vishay Intertechnology 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 Vishay Intertechnology, you can compare the effects of market volatilities on Citic Telecom and Vishay Intertechnology 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 Vishay Intertechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Telecom and Vishay Intertechnology.
Diversification Opportunities for Citic Telecom and Vishay Intertechnology
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Citic and Vishay is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Citic Telecom International and Vishay Intertechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vishay Intertechnology 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 Vishay Intertechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vishay Intertechnology has no effect on the direction of Citic Telecom i.e., Citic Telecom and Vishay Intertechnology go up and down completely randomly.
Pair Corralation between Citic Telecom and Vishay Intertechnology
Assuming the 90 days trading horizon Citic Telecom International is expected to generate 2.33 times more return on investment than Vishay Intertechnology. However, Citic Telecom is 2.33 times more volatile than Vishay Intertechnology. It trades about 0.13 of its potential returns per unit of risk. Vishay Intertechnology is currently generating about -0.17 per unit of risk. If you would invest 19.00 in Citic Telecom International on August 25, 2024 and sell it today you would earn a total of 8.00 from holding Citic Telecom International or generate 42.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citic Telecom International vs. Vishay Intertechnology
Performance |
| Timeline |
| Citic Telecom Intern |
| Vishay Intertechnology |
Citic Telecom and Vishay Intertechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citic Telecom and Vishay Intertechnology
The main advantage of trading using opposite Citic Telecom and Vishay Intertechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Telecom position performs unexpectedly, Vishay Intertechnology 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 Vishay Intertechnology will offset losses from the drop in Vishay Intertechnology's long position.| Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc |
| Vishay Intertechnology vs. Apple Inc | Vishay Intertechnology vs. Apple Inc | Vishay Intertechnology vs. Apple Inc | Vishay Intertechnology 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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