Correlation Between COMBA TELECOM and Citic Telecom
Can any of the company-specific risk be diversified away by investing in both COMBA TELECOM and Citic Telecom 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 COMBA TELECOM and Citic Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COMBA TELECOM SYST and Citic Telecom International, you can compare the effects of market volatilities on COMBA TELECOM and Citic Telecom 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 COMBA TELECOM with a short position of Citic Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMBA TELECOM and Citic Telecom.
Diversification Opportunities for COMBA TELECOM and Citic Telecom
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between COMBA and Citic is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding COMBA TELECOM SYST and Citic Telecom International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citic Telecom Intern and COMBA 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 COMBA TELECOM SYST are associated (or correlated) with Citic Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citic Telecom Intern has no effect on the direction of COMBA TELECOM i.e., COMBA TELECOM and Citic Telecom go up and down completely randomly.
Pair Corralation between COMBA TELECOM and Citic Telecom
Assuming the 90 days trading horizon COMBA TELECOM SYST is expected to under-perform the Citic Telecom. But the stock apears to be less risky and, when comparing its historical volatility, COMBA TELECOM SYST is 1.42 times less risky than Citic Telecom. The stock trades about -0.21 of its potential returns per unit of risk. The Citic Telecom International is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 26.00 in Citic Telecom International on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Citic Telecom International or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COMBA TELECOM SYST vs. Citic Telecom International
Performance |
| Timeline |
| COMBA TELECOM SYST |
| Citic Telecom Intern |
COMBA TELECOM and Citic Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COMBA TELECOM and Citic Telecom
The main advantage of trading using opposite COMBA TELECOM and Citic Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COMBA TELECOM position performs unexpectedly, Citic Telecom 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 Citic Telecom will offset losses from the drop in Citic Telecom's long position.| COMBA TELECOM vs. SIVERS SEMICONDUCTORS AB | COMBA TELECOM vs. Darden Restaurants | COMBA TELECOM vs. Reliance Steel Aluminum | COMBA TELECOM vs. Q2M Managementberatung AG |
| 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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