Correlation Between Citic Telecom and HYATT HOTELS-A

Can any of the company-specific risk be diversified away by investing in both Citic Telecom and HYATT HOTELS-A 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 Citic Telecom and HYATT HOTELS-A into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citic Telecom International and HYATT HOTELS A, you can compare the effects of market volatilities on Citic Telecom and HYATT HOTELS-A 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 Citic Telecom with a short position of HYATT HOTELS-A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Telecom and HYATT HOTELS-A.

Diversification Opportunities for Citic Telecom and HYATT HOTELS-A

-0.23

Correlation Coefficient

Citic Telecom  HYATT HOTELS-A

Very good diversification

The 3 months correlation between Citic and HYATT is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Citic Telecom International and HYATT HOTELS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYATT HOTELS A and Citic 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 Citic Telecom International are associated (or correlated) with HYATT HOTELS-A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYATT HOTELS A has no effect on the direction of Citic Telecom i.e., Citic Telecom and HYATT HOTELS-A go up and down completely randomly.

Pair Corralation between Citic Telecom and HYATT HOTELS-A

Assuming the 90 days trading horizon Citic Telecom International is expected to generate 1.3 times more return on investment than HYATT HOTELS-A. However, Citic Telecom is 1.3 times more volatile than HYATT HOTELS A. It trades about 0.01 of its potential returns per unit of risk. HYATT HOTELS A is currently generating about -0.19 per unit of risk. If you would invest  27.00  in Citic Telecom International on December 30, 2024 and sell it today you would earn a total of  0.00  from holding Citic Telecom International or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Citic Telecom International  vs.  HYATT HOTELS A

Citic Telecom Intern

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Citic Telecom International are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Citic Telecom is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

HYATT HOTELS A

Risk-Adjusted Performance

Very Weak

Over the last 90 days HYATT HOTELS A has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Citic Telecom and HYATT HOTELS-A

The main advantage of trading using opposite Citic Telecom and HYATT HOTELS-A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Telecom position performs unexpectedly, HYATT HOTELS-A 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 HYATT HOTELS-A will offset losses from the drop in HYATT HOTELS-A's long position.

The idea behind Citic Telecom International and HYATT HOTELS A 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.