Correlation Between CITIC Telecom and CITIC

Can any of the company-specific risk be diversified away by investing in both CITIC Telecom and CITIC 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 CITIC 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 CITIC LTD ADR5, you can compare the effects of market volatilities on CITIC Telecom and CITIC 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 CITIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC Telecom and CITIC.

Diversification Opportunities for CITIC Telecom and CITIC

0.65

Correlation Coefficient

CITIC Telecom  CITIC

Poor diversification

The 3 months correlation between CITIC and CITIC is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Telecom International and CITIC LTD ADR5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC LTD ADR5 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 CITIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC LTD ADR5 has no effect on the direction of CITIC Telecom i.e., CITIC Telecom and CITIC go up and down completely randomly.

Pair Corralation between CITIC Telecom and CITIC

Assuming the 90 days horizon CITIC Telecom is expected to generate 1.58 times less return on investment than CITIC. In addition to that, CITIC Telecom is 2.24 times more volatile than CITIC LTD ADR5. It trades about 0.05 of its total potential returns per unit of risk. CITIC LTD ADR5 is currently generating about 0.18 per unit of volatility. If you would invest  520.00  in CITIC LTD ADR5 on May 24, 2025 and sell it today you would earn a total of  95.00  from holding CITIC LTD ADR5 or generate 18.27% return on investment over 90 days.

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

CITIC Telecom International  vs.  CITIC LTD ADR5

CITIC Telecom Intern

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in CITIC Telecom International are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CITIC Telecom may actually be approaching a critical reversion point that can send shares even higher in September 2025.

CITIC LTD ADR5

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CITIC LTD ADR5 are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, CITIC reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CITIC Telecom and CITIC

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

The idea behind CITIC Telecom International and CITIC LTD ADR5 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.