Correlation Between Citic Telecom and SFC Energy

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

Diversification Opportunities for Citic Telecom and SFC Energy

0.0

Correlation Coefficient

Citic Telecom  SFC Energy

Pay attention - limited upside

The 3 months correlation between Citic and SFC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Citic Telecom International and SFC Energy AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SFC Energy AG 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 SFC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SFC Energy AG has no effect on the direction of Citic Telecom i.e., Citic Telecom and SFC Energy go up and down completely randomly.

Pair Corralation between Citic Telecom and SFC Energy

If you would invest  27.00  in Citic Telecom International on December 21, 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	Flat
Strength	Insignificant
Accuracy	1.67%
Values	Daily Returns

Citic Telecom International  vs.  SFC Energy AG

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.

SFC Energy AG

Risk-Adjusted Performance

Good

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

Pair Trading with Citic Telecom and SFC Energy

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

The idea behind Citic Telecom International and SFC Energy AG 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.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.