Correlation Between HUTCHISON TELECOMM and CITIC Telecom
Can any of the company-specific risk be diversified away by investing in both HUTCHISON TELECOMM 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 HUTCHISON TELECOMM and CITIC Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HUTCHISON TELECOMM and CITIC Telecom International, you can compare the effects of market volatilities on HUTCHISON TELECOMM 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 HUTCHISON TELECOMM with a short position of CITIC Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUTCHISON TELECOMM and CITIC Telecom.
Diversification Opportunities for HUTCHISON TELECOMM and CITIC Telecom
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between HUTCHISON and CITIC is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding HUTCHISON TELECOMM 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 HUTCHISON TELECOMM 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 HUTCHISON TELECOMM 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 HUTCHISON TELECOMM i.e., HUTCHISON TELECOMM and CITIC Telecom go up and down completely randomly.
Pair Corralation between HUTCHISON TELECOMM and CITIC Telecom
Assuming the 90 days trading horizon HUTCHISON TELECOMM is expected to generate 3.38 times more return on investment than CITIC Telecom. However, HUTCHISON TELECOMM is 3.38 times more volatile than CITIC Telecom International. It trades about 0.03 of its potential returns per unit of risk. CITIC Telecom International is currently generating about -0.08 per unit of risk. If you would invest 1.40 in HUTCHISON TELECOMM on November 3, 2024 and sell it today you would earn a total of 0.00 from holding HUTCHISON TELECOMM or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HUTCHISON TELECOMM vs. CITIC Telecom International
Performance |
| Timeline |
| HUTCHISON TELECOMM |
| CITIC Telecom Intern |
HUTCHISON TELECOMM and CITIC Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HUTCHISON TELECOMM and CITIC Telecom
The main advantage of trading using opposite HUTCHISON TELECOMM and CITIC Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUTCHISON TELECOMM 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.| HUTCHISON TELECOMM vs. Apple Inc | HUTCHISON TELECOMM vs. Apple Inc | HUTCHISON TELECOMM vs. Apple Inc | HUTCHISON TELECOMM vs. Apple Inc |
| CITIC Telecom vs. EIDESVIK OFFSHORE NK | CITIC Telecom vs. BW OFFSHORE LTD | CITIC Telecom vs. ANGLO ASIAN MINING | CITIC Telecom vs. INSURANCE AUST GRP |
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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