Correlation Between MARKET VECTR and Citic Telecom
Can any of the company-specific risk be diversified away by investing in both MARKET VECTR 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 MARKET VECTR and Citic Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MARKET VECTR RETAIL and Citic Telecom International, you can compare the effects of market volatilities on MARKET VECTR 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 MARKET VECTR with a short position of Citic Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of MARKET VECTR and Citic Telecom.
Diversification Opportunities for MARKET VECTR and Citic Telecom
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MARKET and Citic is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding MARKET VECTR RETAIL 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 MARKET VECTR 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 MARKET VECTR RETAIL 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 MARKET VECTR i.e., MARKET VECTR and Citic Telecom go up and down completely randomly.
Pair Corralation between MARKET VECTR and Citic Telecom
Assuming the 90 days trading horizon MARKET VECTR RETAIL is expected to generate 0.2 times more return on investment than Citic Telecom. However, MARKET VECTR RETAIL is 4.94 times less risky than Citic Telecom. It trades about 0.27 of its potential returns per unit of risk. Citic Telecom International is currently generating about -0.05 per unit of risk. If you would invest 21,745 in MARKET VECTR RETAIL on October 28, 2024 and sell it today you would earn a total of 735.00 from holding MARKET VECTR RETAIL or generate 3.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MARKET VECTR RETAIL vs. Citic Telecom International
Performance |
| Timeline |
| MARKET VECTR RETAIL |
| Citic Telecom Intern |
MARKET VECTR and Citic Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MARKET VECTR and Citic Telecom
The main advantage of trading using opposite MARKET VECTR and Citic Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MARKET VECTR 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.| MARKET VECTR vs. Japan Asia Investment | MARKET VECTR vs. MidCap Financial Investment | MARKET VECTR vs. H2O Retailing | MARKET VECTR vs. Burlington Stores |
| Citic Telecom vs. Keck Seng Investments | Citic Telecom vs. ECHO INVESTMENT ZY | Citic Telecom vs. Japan Asia Investment | Citic Telecom vs. DFS Furniture PLC |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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