Correlation Between FIREWEED METALS and CITIC Telecom
Can any of the company-specific risk be diversified away by investing in both FIREWEED METALS 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 FIREWEED METALS and CITIC Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIREWEED METALS P and CITIC Telecom International, you can compare the effects of market volatilities on FIREWEED METALS 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 FIREWEED METALS with a short position of CITIC Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIREWEED METALS and CITIC Telecom.
Diversification Opportunities for FIREWEED METALS and CITIC Telecom
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between FIREWEED and CITIC is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding FIREWEED METALS P 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 FIREWEED METALS 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 FIREWEED METALS P 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 FIREWEED METALS i.e., FIREWEED METALS and CITIC Telecom go up and down completely randomly.
Pair Corralation between FIREWEED METALS and CITIC Telecom
Assuming the 90 days horizon FIREWEED METALS P is expected to under-perform the CITIC Telecom. But the stock apears to be less risky and, when comparing its historical volatility, FIREWEED METALS P is 1.28 times less risky than CITIC Telecom. The stock trades about -0.04 of its potential returns per unit of risk. The CITIC Telecom International is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 27.00 in CITIC Telecom International on November 7, 2024 and sell it today you would earn a total of 1.00 from holding CITIC Telecom International or generate 3.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FIREWEED METALS P vs. CITIC Telecom International
Performance |
| Timeline |
| FIREWEED METALS P |
| CITIC Telecom Intern |
FIREWEED METALS and CITIC Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIREWEED METALS and CITIC Telecom
The main advantage of trading using opposite FIREWEED METALS and CITIC Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIREWEED METALS 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.| FIREWEED METALS vs. Rio Tinto Group | FIREWEED METALS vs. Anglo American plc | FIREWEED METALS vs. Mineral Resources Limited | FIREWEED METALS vs. Liontown Resources Limited |
| CITIC Telecom vs. Merit Medical Systems | CITIC Telecom vs. China Medical System | CITIC Telecom vs. CarsalesCom | CITIC Telecom vs. INTER CARS SA |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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