Correlation Between Citic Telecom and Sartorius Stedim

Can any of the company-specific risk be diversified away by investing in both Citic Telecom and Sartorius Stedim 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 Sartorius Stedim 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 Sartorius Stedim Biotech, you can compare the effects of market volatilities on Citic Telecom and Sartorius Stedim 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 Sartorius Stedim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Telecom and Sartorius Stedim.

Diversification Opportunities for Citic Telecom and Sartorius Stedim

-0.24

Correlation Coefficient

Citic Telecom  Sartorius Stedim

Very good diversification

The 3 months correlation between Citic and Sartorius is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Citic Telecom International and Sartorius Stedim Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sartorius Stedim Biotech 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 Sartorius Stedim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sartorius Stedim Biotech has no effect on the direction of Citic Telecom i.e., Citic Telecom and Sartorius Stedim go up and down completely randomly.

Pair Corralation between Citic Telecom and Sartorius Stedim

Assuming the 90 days trading horizon Citic Telecom is expected to generate 39.59 times less return on investment than Sartorius Stedim. But when comparing it to its historical volatility, Citic Telecom International is 1.45 times less risky than Sartorius Stedim. It trades about 0.01 of its potential returns per unit of risk. Sartorius Stedim Biotech is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  17,970  in Sartorius Stedim Biotech on October 6, 2024 and sell it today you would earn a total of  915.00  from holding Sartorius Stedim Biotech or generate 5.09% 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.  Sartorius Stedim Biotech

Citic Telecom Intern

Risk-Adjusted Performance

0 of 100

Very Weak

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

Sartorius Stedim Biotech

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sartorius Stedim Biotech are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Sartorius Stedim may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Citic Telecom and Sartorius Stedim

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

The idea behind Citic Telecom International and Sartorius Stedim Biotech 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.