Correlation Between Public Storage and CITIC Telecom
Can any of the company-specific risk be diversified away by investing in both Public Storage 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 Public Storage and CITIC Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Storage and CITIC Telecom International, you can compare the effects of market volatilities on Public Storage 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 Public Storage with a short position of CITIC Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Storage and CITIC Telecom.
Diversification Opportunities for Public Storage and CITIC Telecom
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Public and CITIC is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Public Storage 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 Public Storage 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 Public Storage 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 Public Storage i.e., Public Storage and CITIC Telecom go up and down completely randomly.
Pair Corralation between Public Storage and CITIC Telecom
Assuming the 90 days horizon Public Storage is expected to generate 9.42 times less return on investment than CITIC Telecom. But when comparing it to its historical volatility, Public Storage is 5.21 times less risky than CITIC Telecom. It trades about 0.04 of its potential returns per unit of risk. CITIC Telecom International is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 4.19 in CITIC Telecom International on September 12, 2024 and sell it today you would earn a total of 22.81 from holding CITIC Telecom International or generate 544.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Public Storage vs. CITIC Telecom International
Performance |
| Timeline |
| Public Storage |
| CITIC Telecom Intern |
Public Storage and CITIC Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Storage and CITIC Telecom
The main advantage of trading using opposite Public Storage and CITIC Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Storage 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.| Public Storage vs. BROADSTNET LEADL 00025 | Public Storage vs. CARSALESCOM | Public Storage vs. TEXAS ROADHOUSE | Public Storage vs. TRAINLINE PLC LS |
| CITIC Telecom vs. Superior Plus Corp | CITIC Telecom vs. SIVERS SEMICONDUCTORS AB | CITIC Telecom vs. Norsk Hydro ASA | CITIC Telecom vs. Reliance Steel Aluminum |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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