Correlation Between Citic Telecom and ENEOS Holdings

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

Diversification Opportunities for Citic Telecom and ENEOS Holdings

0.31

Correlation Coefficient

Citic Telecom  ENEOS Holdings

Weak diversification

The 3 months correlation between Citic and ENEOS is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Citic Telecom International and ENEOS Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENEOS Holdings 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 ENEOS Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENEOS Holdings has no effect on the direction of Citic Telecom i.e., Citic Telecom and ENEOS Holdings go up and down completely randomly.

Pair Corralation between Citic Telecom and ENEOS Holdings

Assuming the 90 days trading horizon Citic Telecom is expected to generate 3.25 times less return on investment than ENEOS Holdings. In addition to that, Citic Telecom is 1.28 times more volatile than ENEOS Holdings. It trades about 0.01 of its total potential returns per unit of risk. ENEOS Holdings is currently generating about 0.06 per unit of volatility. If you would invest  488.00  in ENEOS Holdings on December 29, 2024 and sell it today you would earn a total of  32.00  from holding ENEOS Holdings or generate 6.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Citic Telecom International  vs.  ENEOS Holdings

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 newest stock price uproar, may contribute to short-horizon losses for the private investors.

ENEOS Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ENEOS Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ENEOS Holdings may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Citic Telecom and ENEOS Holdings

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

The idea behind Citic Telecom International and ENEOS Holdings 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.