Correlation Between CHINA TELECOM and SolarEdge Technologies
Can any of the company-specific risk be diversified away by investing in both CHINA TELECOM and SolarEdge Technologies 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 CHINA TELECOM and SolarEdge Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA TELECOM H and SolarEdge Technologies, you can compare the effects of market volatilities on CHINA TELECOM and SolarEdge Technologies 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 CHINA TELECOM with a short position of SolarEdge Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA TELECOM and SolarEdge Technologies.
Diversification Opportunities for CHINA TELECOM and SolarEdge Technologies
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between CHINA and SolarEdge is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding CHINA TELECOM H and SolarEdge Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SolarEdge Technologies and CHINA TELECOM 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 CHINA TELECOM H are associated (or correlated) with SolarEdge Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SolarEdge Technologies has no effect on the direction of CHINA TELECOM i.e., CHINA TELECOM and SolarEdge Technologies go up and down completely randomly.
Pair Corralation between CHINA TELECOM and SolarEdge Technologies
Assuming the 90 days trading horizon CHINA TELECOM H is expected to generate 0.74 times more return on investment than SolarEdge Technologies. However, CHINA TELECOM H is 1.35 times less risky than SolarEdge Technologies. It trades about 0.1 of its potential returns per unit of risk. SolarEdge Technologies is currently generating about -0.09 per unit of risk. If you would invest 11.00 in CHINA TELECOM H on September 14, 2024 and sell it today you would earn a total of 41.00 from holding CHINA TELECOM H or generate 372.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA TELECOM H vs. SolarEdge Technologies
Performance |
| Timeline |
| CHINA TELECOM H |
| SolarEdge Technologies |
CHINA TELECOM and SolarEdge Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA TELECOM and SolarEdge Technologies
The main advantage of trading using opposite CHINA TELECOM and SolarEdge Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA TELECOM position performs unexpectedly, SolarEdge Technologies 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 SolarEdge Technologies will offset losses from the drop in SolarEdge Technologies' long position.| CHINA TELECOM vs. UNITED RENTALS | CHINA TELECOM vs. CAL MAINE FOODS | CHINA TELECOM vs. Shenandoah Telecommunications | CHINA TELECOM vs. MAROC TELECOM |
| SolarEdge Technologies vs. USWE SPORTS AB | SolarEdge Technologies vs. CHINA TELECOM H | SolarEdge Technologies vs. Citic Telecom International | SolarEdge Technologies vs. PLAYTIKA HOLDING DL 01 |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |