Correlation Between Taiwan Semiconductor and CITIC Telecom

Can any of the company-specific risk be diversified away by investing in both Taiwan Semiconductor 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 Taiwan Semiconductor and CITIC Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Taiwan Semiconductor Manufacturing and CITIC Telecom International, you can compare the effects of market volatilities on Taiwan Semiconductor 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 Taiwan Semiconductor with a short position of CITIC Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Semiconductor and CITIC Telecom.

Diversification Opportunities for Taiwan Semiconductor and CITIC Telecom

0.0

Correlation Coefficient

Taiwan Semiconductor  CITIC Telecom

Pay attention - limited upside

The 3 months correlation between Taiwan and CITIC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Semiconductor Manufactu 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 Taiwan Semiconductor 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 Taiwan Semiconductor Manufacturing 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 Taiwan Semiconductor i.e., Taiwan Semiconductor and CITIC Telecom go up and down completely randomly.

Pair Corralation between Taiwan Semiconductor and CITIC Telecom

If you would invest  1,708  in Taiwan Semiconductor Manufacturing on September 7, 2025 and sell it today you would earn a total of  16.00  from holding Taiwan Semiconductor Manufacturing or generate 0.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Taiwan Semiconductor Manufactu  vs.  CITIC Telecom International

Taiwan Semiconductor

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Taiwan Semiconductor Manufacturing are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Taiwan Semiconductor is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

CITIC Telecom Intern

Risk-Adjusted Performance

Weakest

Over the last 90 days CITIC Telecom International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CITIC Telecom is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Taiwan Semiconductor and CITIC Telecom

The main advantage of trading using opposite Taiwan Semiconductor and CITIC Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Semiconductor 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 Taiwan Semiconductor Manufacturing 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.