Correlation Between MICRONIC MYDATA and CHINA TELECOM
Can any of the company-specific risk be diversified away by investing in both MICRONIC MYDATA and CHINA 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 MICRONIC MYDATA and CHINA TELECOM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MICRONIC MYDATA and CHINA TELECOM H , you can compare the effects of market volatilities on MICRONIC MYDATA and CHINA 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 MICRONIC MYDATA with a short position of CHINA TELECOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of MICRONIC MYDATA and CHINA TELECOM.
Diversification Opportunities for MICRONIC MYDATA and CHINA TELECOM
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MICRONIC and CHINA is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding MICRONIC MYDATA and CHINA TELECOM H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA TELECOM H and MICRONIC MYDATA 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 MICRONIC MYDATA are associated (or correlated) with CHINA TELECOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA TELECOM H has no effect on the direction of MICRONIC MYDATA i.e., MICRONIC MYDATA and CHINA TELECOM go up and down completely randomly.
Pair Corralation between MICRONIC MYDATA and CHINA TELECOM
Assuming the 90 days trading horizon MICRONIC MYDATA is expected to generate 1.67 times less return on investment than CHINA TELECOM. But when comparing it to its historical volatility, MICRONIC MYDATA is 1.48 times less risky than CHINA TELECOM. It trades about 0.08 of its potential returns per unit of risk. CHINA TELECOM H is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 12.00 in CHINA TELECOM H on October 13, 2024 and sell it today you would earn a total of 40.00 from holding CHINA TELECOM H or generate 333.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
MICRONIC MYDATA vs. CHINA TELECOM H
Performance |
| Timeline |
| MICRONIC MYDATA |
| CHINA TELECOM H |
MICRONIC MYDATA and CHINA TELECOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MICRONIC MYDATA and CHINA TELECOM
The main advantage of trading using opposite MICRONIC MYDATA and CHINA TELECOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MICRONIC MYDATA position performs unexpectedly, CHINA 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 CHINA TELECOM will offset losses from the drop in CHINA TELECOM's long position.| MICRONIC MYDATA vs. ADDUS HOMECARE | MICRONIC MYDATA vs. Ultra Clean Holdings | MICRONIC MYDATA vs. Columbia Sportswear | MICRONIC MYDATA vs. ALERION CLEANPOWER |
| CHINA TELECOM vs. Haier Smart Home | CHINA TELECOM vs. WisdomTree Investments | CHINA TELECOM vs. Keck Seng Investments | CHINA TELECOM vs. SLR Investment Corp |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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