Correlation Between Rayonier Advanced and CHINA TELECOM
Can any of the company-specific risk be diversified away by investing in both Rayonier Advanced 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 Rayonier Advanced and CHINA TELECOM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rayonier Advanced Materials and CHINA TELECOM H , you can compare the effects of market volatilities on Rayonier Advanced 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 Rayonier Advanced with a short position of CHINA TELECOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rayonier Advanced and CHINA TELECOM.
Diversification Opportunities for Rayonier Advanced and CHINA TELECOM
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rayonier and CHINA is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Rayonier Advanced Materials 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 Rayonier Advanced 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 Rayonier Advanced Materials 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 Rayonier Advanced i.e., Rayonier Advanced and CHINA TELECOM go up and down completely randomly.
Pair Corralation between Rayonier Advanced and CHINA TELECOM
Assuming the 90 days horizon Rayonier Advanced Materials is expected to under-perform the CHINA TELECOM. In addition to that, Rayonier Advanced is 2.97 times more volatile than CHINA TELECOM H . It trades about -0.02 of its total potential returns per unit of risk. CHINA TELECOM H is currently generating about 0.03 per unit of volatility. If you would invest 51.00 in CHINA TELECOM H on September 26, 2024 and sell it today you would earn a total of 1.00 from holding CHINA TELECOM H or generate 1.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rayonier Advanced Materials vs. CHINA TELECOM H
Performance |
| Timeline |
| Rayonier Advanced |
| CHINA TELECOM H |
Rayonier Advanced and CHINA TELECOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rayonier Advanced and CHINA TELECOM
The main advantage of trading using opposite Rayonier Advanced and CHINA TELECOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rayonier Advanced 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.| Rayonier Advanced vs. Air Liquide SA | Rayonier Advanced vs. AIR LIQUIDE ADR | Rayonier Advanced vs. Shin Etsu Chemical Co | Rayonier Advanced vs. BASF SE |
| CHINA TELECOM vs. TRAVEL LEISURE DL 01 | CHINA TELECOM vs. Goodyear Tire Rubber | CHINA TELECOM vs. ANTA SPORTS PRODUCT | CHINA TELECOM vs. Rayonier Advanced Materials |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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