Correlation Between CHINA TELECOM and LyondellBasell Industries
Can any of the company-specific risk be diversified away by investing in both CHINA TELECOM and LyondellBasell Industries 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 LyondellBasell Industries 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 LyondellBasell Industries NV, you can compare the effects of market volatilities on CHINA TELECOM and LyondellBasell Industries 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 LyondellBasell Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA TELECOM and LyondellBasell Industries.
Diversification Opportunities for CHINA TELECOM and LyondellBasell Industries
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CHINA and LyondellBasell is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding CHINA TELECOM H and LyondellBasell Industries NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LyondellBasell Industries 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 LyondellBasell Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LyondellBasell Industries has no effect on the direction of CHINA TELECOM i.e., CHINA TELECOM and LyondellBasell Industries go up and down completely randomly.
Pair Corralation between CHINA TELECOM and LyondellBasell Industries
If you would invest 52.00 in CHINA TELECOM H on September 15, 2024 and sell it today you would earn a total of 0.00 from holding CHINA TELECOM H or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA TELECOM H vs. LyondellBasell Industries NV
Performance |
| Timeline |
| CHINA TELECOM H |
| LyondellBasell Industries |
CHINA TELECOM and LyondellBasell Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA TELECOM and LyondellBasell Industries
The main advantage of trading using opposite CHINA TELECOM and LyondellBasell Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA TELECOM position performs unexpectedly, LyondellBasell Industries 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 LyondellBasell Industries will offset losses from the drop in LyondellBasell Industries' long position.| CHINA TELECOM vs. Apple Inc | CHINA TELECOM vs. Apple Inc | CHINA TELECOM vs. Apple Inc | CHINA TELECOM vs. Apple Inc |
| LyondellBasell Industries vs. CHINA TELECOM H | LyondellBasell Industries vs. GRIFFIN MINING LTD | LyondellBasell Industries vs. MAROC TELECOM | LyondellBasell Industries vs. CITIC Telecom International |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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