Correlation Between CHINA TELECOM and Associated British
Can any of the company-specific risk be diversified away by investing in both CHINA TELECOM and Associated British 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 Associated British 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 Associated British Foods, you can compare the effects of market volatilities on CHINA TELECOM and Associated British 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 Associated British. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA TELECOM and Associated British.
Diversification Opportunities for CHINA TELECOM and Associated British
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CHINA and Associated is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding CHINA TELECOM H and Associated British Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated British Foods 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 Associated British. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated British Foods has no effect on the direction of CHINA TELECOM i.e., CHINA TELECOM and Associated British go up and down completely randomly.
Pair Corralation between CHINA TELECOM and Associated British
If you would invest 2,550 in Associated British Foods on September 20, 2024 and sell it today you would earn a total of 7.00 from holding Associated British Foods or generate 0.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA TELECOM H vs. Associated British Foods
Performance |
| Timeline |
| CHINA TELECOM H |
| Associated British Foods |
CHINA TELECOM and Associated British Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA TELECOM and Associated British
The main advantage of trading using opposite CHINA TELECOM and Associated British positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA TELECOM position performs unexpectedly, Associated British 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 Associated British will offset losses from the drop in Associated British's long position.| CHINA TELECOM vs. Choice Hotels International | CHINA TELECOM vs. MELIA HOTELS | CHINA TELECOM vs. InterContinental Hotels Group | CHINA TELECOM vs. INTERCONT HOTELS |
| Associated British vs. CyberArk Software | Associated British vs. EHEALTH | Associated British vs. YOOMA WELLNESS INC | Associated British vs. ATRYS HEALTH SA |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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