Correlation Between Tianjin Capital and CITIC Telecom
Can any of the company-specific risk be diversified away by investing in both Tianjin Capital 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 Tianjin Capital and CITIC Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tianjin Capital Environmental and CITIC Telecom International, you can compare the effects of market volatilities on Tianjin Capital 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 Tianjin Capital with a short position of CITIC Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Capital and CITIC Telecom.
Diversification Opportunities for Tianjin Capital and CITIC Telecom
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Tianjin and CITIC is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Capital Environmental 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 Tianjin Capital 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 Tianjin Capital Environmental 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 Tianjin Capital i.e., Tianjin Capital and CITIC Telecom go up and down completely randomly.
Pair Corralation between Tianjin Capital and CITIC Telecom
Assuming the 90 days horizon Tianjin Capital Environmental is expected to generate 0.69 times more return on investment than CITIC Telecom. However, Tianjin Capital Environmental is 1.46 times less risky than CITIC Telecom. It trades about -0.09 of its potential returns per unit of risk. CITIC Telecom International is currently generating about -0.09 per unit of risk. If you would invest 40.00 in Tianjin Capital Environmental on October 30, 2024 and sell it today you would lose (1.00) from holding Tianjin Capital Environmental or give up 2.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tianjin Capital Environmental vs. CITIC Telecom International
Performance |
| Timeline |
| Tianjin Capital Envi |
| CITIC Telecom Intern |
Tianjin Capital and CITIC Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Capital and CITIC Telecom
The main advantage of trading using opposite Tianjin Capital and CITIC Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Capital 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.| Tianjin Capital vs. The Trade Desk | Tianjin Capital vs. CanSino Biologics | Tianjin Capital vs. TRADELINK ELECTRON | Tianjin Capital vs. Carsales |
| CITIC Telecom vs. Perseus Mining Limited | CITIC Telecom vs. VITEC SOFTWARE GROUP | CITIC Telecom vs. Calibre Mining Corp | CITIC Telecom vs. FIREWEED METALS P |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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