Correlation Between TYSON FOODS and CITIC Telecom
Can any of the company-specific risk be diversified away by investing in both TYSON FOODS 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 TYSON FOODS and CITIC Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TYSON FOODS A and CITIC Telecom International, you can compare the effects of market volatilities on TYSON FOODS 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 TYSON FOODS with a short position of CITIC Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of TYSON FOODS and CITIC Telecom.
Diversification Opportunities for TYSON FOODS and CITIC Telecom
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TYSON and CITIC is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding TYSON FOODS A 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 TYSON FOODS 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 TYSON FOODS A 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 TYSON FOODS i.e., TYSON FOODS and CITIC Telecom go up and down completely randomly.
Pair Corralation between TYSON FOODS and CITIC Telecom
Assuming the 90 days trading horizon TYSON FOODS A is expected to generate 0.34 times more return on investment than CITIC Telecom. However, TYSON FOODS A is 2.91 times less risky than CITIC Telecom. It trades about 0.05 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 5,470 in TYSON FOODS A on December 28, 2024 and sell it today you would earn a total of 234.00 from holding TYSON FOODS A or generate 4.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
TYSON FOODS A vs. CITIC Telecom International
Performance |
Timeline |
TYSON FOODS A |
CITIC Telecom Intern |
TYSON FOODS and CITIC Telecom Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with TYSON FOODS and CITIC Telecom
The main advantage of trading using opposite TYSON FOODS and CITIC Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TYSON FOODS 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.TYSON FOODS vs. Digilife Technologies Limited | TYSON FOODS vs. T Mobile | TYSON FOODS vs. Ribbon Communications | TYSON FOODS vs. Firan Technology Group |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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