Correlation Between Westag Getalit and CHINA TELECOM

Can any of the company-specific risk be diversified away by investing in both Westag Getalit and CHINA 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 Westag Getalit and CHINA TELECOM into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Westag Getalit AG and CHINA TELECOM H , you can compare the effects of market volatilities on Westag Getalit and CHINA 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 Westag Getalit with a short position of CHINA TELECOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westag Getalit and CHINA TELECOM.

Diversification Opportunities for Westag Getalit and CHINA TELECOM

0.31

Correlation Coefficient

Westag Getalit  CHINA TELECOM

Weak diversification

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

Pair Corralation between Westag Getalit and CHINA TELECOM

If you would invest  2,400  in Westag Getalit AG on September 20, 2024 and sell it today you would earn a total of  20.00  from holding Westag Getalit AG or generate 0.83% return on investment over 90 days.

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

Westag Getalit AG  vs.  CHINA TELECOM H

Westag Getalit AG

Risk-Adjusted Performance

0 of 100

Very Weak

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

CHINA TELECOM H

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CHINA TELECOM H are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical indicators, CHINA TELECOM 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 Westag Getalit and CHINA TELECOM

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

The idea behind Westag Getalit AG and CHINA TELECOM H 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.