Correlation Between Citic Telecom and Hisamitsu Pharmaceutical
Can any of the company-specific risk be diversified away by investing in both Citic Telecom and Hisamitsu Pharmaceutical 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 Hisamitsu Pharmaceutical 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 Hisamitsu Pharmaceutical Co, you can compare the effects of market volatilities on Citic Telecom and Hisamitsu Pharmaceutical 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 Hisamitsu Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citic Telecom and Hisamitsu Pharmaceutical.
Diversification Opportunities for Citic Telecom and Hisamitsu Pharmaceutical
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Citic and Hisamitsu is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Citic Telecom International and Hisamitsu Pharmaceutical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hisamitsu Pharmaceutical 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 Hisamitsu Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hisamitsu Pharmaceutical has no effect on the direction of Citic Telecom i.e., Citic Telecom and Hisamitsu Pharmaceutical go up and down completely randomly.
Pair Corralation between Citic Telecom and Hisamitsu Pharmaceutical
Assuming the 90 days trading horizon Citic Telecom International is expected to generate 4.13 times more return on investment than Hisamitsu Pharmaceutical. However, Citic Telecom is 4.13 times more volatile than Hisamitsu Pharmaceutical Co. It trades about 0.06 of its potential returns per unit of risk. Hisamitsu Pharmaceutical Co is currently generating about 0.02 per unit of risk. If you would invest 8.69 in Citic Telecom International on October 4, 2024 and sell it today you would earn a total of 18.31 from holding Citic Telecom International or generate 210.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Citic Telecom International vs. Hisamitsu Pharmaceutical Co
Performance |
Timeline |
Citic Telecom Intern |
Hisamitsu Pharmaceutical |
Citic Telecom and Hisamitsu Pharmaceutical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Citic Telecom and Hisamitsu Pharmaceutical
The main advantage of trading using opposite Citic Telecom and Hisamitsu Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citic Telecom position performs unexpectedly, Hisamitsu Pharmaceutical 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 Hisamitsu Pharmaceutical will offset losses from the drop in Hisamitsu Pharmaceutical's long position.Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc | Citic Telecom vs. Apple Inc |
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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.
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