Correlation Between FIREWEED METALS and Citic Telecom

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Can any of the company-specific risk be diversified away by investing in both FIREWEED METALS and Citic Telecom 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 FIREWEED METALS and Citic Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIREWEED METALS P and Citic Telecom International, you can compare the effects of market volatilities on FIREWEED METALS and Citic Telecom 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 FIREWEED METALS with a short position of Citic Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIREWEED METALS and Citic Telecom.

Diversification Opportunities for FIREWEED METALS and Citic Telecom

FIREWEEDCiticDiversified AwayFIREWEEDCiticDiversified Away100%
0.1
  Correlation Coefficient

Average diversification

The 3 months correlation between FIREWEED and Citic is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding FIREWEED METALS P and Citic Telecom International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citic Telecom Intern and FIREWEED METALS 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 FIREWEED METALS P are associated (or correlated) with Citic Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citic Telecom Intern has no effect on the direction of FIREWEED METALS i.e., FIREWEED METALS and Citic Telecom go up and down completely randomly.

Pair Corralation between FIREWEED METALS and Citic Telecom

Assuming the 90 days horizon FIREWEED METALS P is expected to generate 1.17 times more return on investment than Citic Telecom. However, FIREWEED METALS is 1.17 times more volatile than Citic Telecom International. It trades about 0.08 of its potential returns per unit of risk. Citic Telecom International is currently generating about 0.01 per unit of risk. If you would invest  91.00  in FIREWEED METALS P on October 31, 2024 and sell it today you would earn a total of  10.00  from holding FIREWEED METALS P or generate 10.99% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

FIREWEED METALS P  vs.  Citic Telecom International

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -15-10-505
JavaScript chart by amCharts 3.21.15M0G B7O
       Timeline  
FIREWEED METALS P 

Risk-Adjusted Performance

6 of 100

 
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Modest
Compared to the overall equity markets, risk-adjusted returns on investments in FIREWEED METALS P are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, FIREWEED METALS reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan0.850.90.951
Citic Telecom Intern 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 current stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan0.260.2650.270.2750.28

FIREWEED METALS and Citic Telecom Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-8.22-6.16-4.09-2.030.022.064.166.258.35 0.010.020.030.040.050.060.070.08
JavaScript chart by amCharts 3.21.15M0G B7O
       Returns  

Pair Trading with FIREWEED METALS and Citic Telecom

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

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