Correlation Between ANGANG STEEL and CITIC Telecom
Can any of the company-specific risk be diversified away by investing in both ANGANG STEEL 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 ANGANG STEEL and CITIC Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANGANG STEEL H and CITIC Telecom International, you can compare the effects of market volatilities on ANGANG STEEL 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 ANGANG STEEL with a short position of CITIC Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGANG STEEL and CITIC Telecom.
Diversification Opportunities for ANGANG STEEL and CITIC Telecom
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ANGANG and CITIC is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding ANGANG STEEL H 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 ANGANG STEEL 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 ANGANG STEEL H 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 ANGANG STEEL i.e., ANGANG STEEL and CITIC Telecom go up and down completely randomly.
Pair Corralation between ANGANG STEEL and CITIC Telecom
Assuming the 90 days trading horizon ANGANG STEEL H is expected to generate 1.93 times more return on investment than CITIC Telecom. However, ANGANG STEEL is 1.93 times more volatile than CITIC Telecom International. It trades about 0.02 of its potential returns per unit of risk. CITIC Telecom International is currently generating about -0.09 per unit of risk. If you would invest 18.00 in ANGANG STEEL H on October 30, 2024 and sell it today you would earn a total of 0.00 from holding ANGANG STEEL H or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANGANG STEEL H vs. CITIC Telecom International
Performance |
| Timeline |
| ANGANG STEEL H |
| CITIC Telecom Intern |
ANGANG STEEL and CITIC Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANGANG STEEL and CITIC Telecom
The main advantage of trading using opposite ANGANG STEEL and CITIC Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGANG STEEL 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.| ANGANG STEEL vs. Canadian Utilities Limited | ANGANG STEEL vs. SPARTAN STORES | ANGANG STEEL vs. JIAHUA STORES | ANGANG STEEL vs. BJs Wholesale Club |
| CITIC Telecom vs. Perseus Mining Limited | CITIC Telecom vs. VITEC SOFTWARE GROUP | CITIC Telecom vs. Calibre Mining Corp | CITIC Telecom vs. FIREWEED METALS P |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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