Correlation Between KENEDIX OFFICE and Citic Telecom
Can any of the company-specific risk be diversified away by investing in both KENEDIX OFFICE 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 KENEDIX OFFICE and Citic Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KENEDIX OFFICE INV and Citic Telecom International, you can compare the effects of market volatilities on KENEDIX OFFICE 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 KENEDIX OFFICE with a short position of Citic Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of KENEDIX OFFICE and Citic Telecom.
Diversification Opportunities for KENEDIX OFFICE and Citic Telecom
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KENEDIX and Citic is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding KENEDIX OFFICE INV 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 KENEDIX OFFICE 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 KENEDIX OFFICE INV 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 KENEDIX OFFICE i.e., KENEDIX OFFICE and Citic Telecom go up and down completely randomly.
Pair Corralation between KENEDIX OFFICE and Citic Telecom
Assuming the 90 days horizon KENEDIX OFFICE INV is expected to generate 0.7 times more return on investment than Citic Telecom. However, KENEDIX OFFICE INV is 1.42 times less risky than Citic Telecom. It trades about 0.05 of its potential returns per unit of risk. Citic Telecom International is currently generating about 0.01 per unit of risk. If you would invest 87,500 in KENEDIX OFFICE INV on September 12, 2024 and sell it today you would earn a total of 1,500 from holding KENEDIX OFFICE INV or generate 1.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KENEDIX OFFICE INV vs. Citic Telecom International
Performance |
| Timeline |
| KENEDIX OFFICE INV |
| Citic Telecom Intern |
KENEDIX OFFICE and Citic Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KENEDIX OFFICE and Citic Telecom
The main advantage of trading using opposite KENEDIX OFFICE and Citic Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KENEDIX OFFICE 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.| KENEDIX OFFICE vs. Apple Inc | KENEDIX OFFICE vs. Apple Inc | KENEDIX OFFICE vs. Apple Inc | KENEDIX OFFICE vs. Apple Inc |
| Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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