Correlation Between Citic Telecom and Walmart
Can any of the company-specific risk be diversified away by investing in both Citic Telecom and Walmart 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 Walmart 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 Walmart, you can compare the effects of market volatilities on Citic Telecom and Walmart 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 Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Telecom and Walmart.
Diversification Opportunities for Citic Telecom and Walmart
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citic and Walmart is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Citic Telecom International and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart 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 Walmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walmart has no effect on the direction of Citic Telecom i.e., Citic Telecom and Walmart go up and down completely randomly.
Pair Corralation between Citic Telecom and Walmart
Assuming the 90 days trading horizon Citic Telecom International is expected to generate 7.59 times more return on investment than Walmart. However, Citic Telecom is 7.59 times more volatile than Walmart. It trades about 0.07 of its potential returns per unit of risk. Walmart is currently generating about 0.22 per unit of risk. If you would invest 11.00 in Citic Telecom International on September 14, 2024 and sell it today you would earn a total of 16.00 from holding Citic Telecom International or generate 145.45% 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. Walmart
Performance |
| Timeline |
| Citic Telecom Intern |
| Walmart |
Citic Telecom and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citic Telecom and Walmart
The main advantage of trading using opposite Citic Telecom and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Telecom position performs unexpectedly, Walmart 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 Walmart will offset losses from the drop in Walmart's long position.| Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc |
| Walmart vs. Citic Telecom International | Walmart vs. Corporate Office Properties | Walmart vs. ARDAGH METAL PACDL 0001 | Walmart vs. Shenandoah Telecommunications |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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