Correlation Between INFORMATION SVC and CHINA TELECOM
Can any of the company-specific risk be diversified away by investing in both INFORMATION SVC and CHINA 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 INFORMATION SVC and CHINA TELECOM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INFORMATION SVC GRP and CHINA TELECOM H , you can compare the effects of market volatilities on INFORMATION SVC and CHINA 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 INFORMATION SVC with a short position of CHINA TELECOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of INFORMATION SVC and CHINA TELECOM.
Diversification Opportunities for INFORMATION SVC and CHINA TELECOM
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between INFORMATION and CHINA is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding INFORMATION SVC GRP and CHINA TELECOM H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA TELECOM H and INFORMATION SVC 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 INFORMATION SVC GRP are associated (or correlated) with CHINA TELECOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA TELECOM H has no effect on the direction of INFORMATION SVC i.e., INFORMATION SVC and CHINA TELECOM go up and down completely randomly.
Pair Corralation between INFORMATION SVC and CHINA TELECOM
Assuming the 90 days horizon INFORMATION SVC GRP is expected to generate 3.39 times more return on investment than CHINA TELECOM. However, INFORMATION SVC is 3.39 times more volatile than CHINA TELECOM H . It trades about 0.21 of its potential returns per unit of risk. CHINA TELECOM H is currently generating about -0.21 per unit of risk. If you would invest 276.00 in INFORMATION SVC GRP on September 25, 2024 and sell it today you would earn a total of 54.00 from holding INFORMATION SVC GRP or generate 19.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INFORMATION SVC GRP vs. CHINA TELECOM H
Performance |
| Timeline |
| INFORMATION SVC GRP |
| CHINA TELECOM H |
INFORMATION SVC and CHINA TELECOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INFORMATION SVC and CHINA TELECOM
The main advantage of trading using opposite INFORMATION SVC and CHINA TELECOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INFORMATION SVC position performs unexpectedly, CHINA 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 CHINA TELECOM will offset losses from the drop in CHINA TELECOM's long position.| INFORMATION SVC vs. Lifeway Foods | INFORMATION SVC vs. CN MODERN DAIRY | INFORMATION SVC vs. Food Life Companies | INFORMATION SVC vs. Tyson Foods |
| CHINA TELECOM vs. PUBLIC STORAGE PRFO | CHINA TELECOM vs. TERADATA | CHINA TELECOM vs. MICRONIC MYDATA | CHINA TELECOM vs. INFORMATION SVC GRP |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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