Correlation Between Citic Telecom and Sporttotal
Can any of the company-specific risk be diversified away by investing in both Citic Telecom and Sporttotal 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 Sporttotal 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 Sporttotal AG, you can compare the effects of market volatilities on Citic Telecom and Sporttotal 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 Sporttotal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Telecom and Sporttotal.
Diversification Opportunities for Citic Telecom and Sporttotal
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citic and Sporttotal is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Citic Telecom International and Sporttotal AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sporttotal AG 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 Sporttotal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sporttotal AG has no effect on the direction of Citic Telecom i.e., Citic Telecom and Sporttotal go up and down completely randomly.
Pair Corralation between Citic Telecom and Sporttotal
Assuming the 90 days trading horizon Citic Telecom International is expected to generate 1.11 times more return on investment than Sporttotal. However, Citic Telecom is 1.11 times more volatile than Sporttotal AG. It trades about 0.1 of its potential returns per unit of risk. Sporttotal AG is currently generating about -0.09 per unit of risk. If you would invest 21.00 in Citic Telecom International on August 29, 2024 and sell it today you would earn a total of 6.00 from holding Citic Telecom International or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Citic Telecom International vs. Sporttotal AG
Performance |
| Timeline |
| Citic Telecom Intern |
| Sporttotal AG |
Citic Telecom and Sporttotal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citic Telecom and Sporttotal
The main advantage of trading using opposite Citic Telecom and Sporttotal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Telecom position performs unexpectedly, Sporttotal 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 Sporttotal will offset losses from the drop in Sporttotal's long position.| Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc |
| Sporttotal vs. UNITED UTILITIES GR | Sporttotal vs. BORR DRILLING NEW | Sporttotal vs. MagnaChip Semiconductor Corp | Sporttotal vs. Tianjin Capital Environmental |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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