Correlation Between SIDETRADE and CHINA TELECOM

Can any of the company-specific risk be diversified away by investing in both SIDETRADE 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 SIDETRADE and CHINA TELECOM into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SIDETRADE EO 1 and CHINA TELECOM H , you can compare the effects of market volatilities on SIDETRADE 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 SIDETRADE with a short position of CHINA TELECOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIDETRADE and CHINA TELECOM.

Diversification Opportunities for SIDETRADE and CHINA TELECOM

0.0

Correlation Coefficient

SIDETRADE  CHINA TELECOM

Pay attention - limited upside

The 3 months correlation between SIDETRADE and CHINA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SIDETRADE EO 1 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 SIDETRADE 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 SIDETRADE EO 1 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 SIDETRADE i.e., SIDETRADE and CHINA TELECOM go up and down completely randomly.

Pair Corralation between SIDETRADE and CHINA TELECOM

If you would invest  22,000  in SIDETRADE EO 1 on December 30, 2024 and sell it today you would earn a total of  2,400  from holding SIDETRADE EO 1 or generate 10.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

SIDETRADE EO 1  vs.  CHINA TELECOM H

SIDETRADE EO 1

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SIDETRADE EO 1 are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, SIDETRADE may actually be approaching a critical reversion point that can send shares even higher in April 2025.

CHINA TELECOM H

Risk-Adjusted Performance

Very Weak

Over the last 90 days CHINA TELECOM H has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical indicators, CHINA TELECOM is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with SIDETRADE and CHINA TELECOM

The main advantage of trading using opposite SIDETRADE and CHINA TELECOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIDETRADE 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.

The idea behind SIDETRADE EO 1 and CHINA TELECOM H pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.