Correlation Between TRAVEL + and CITIC Telecom

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

By analyzing existing cross correlation between TRAVEL LEISURE DL 01 and CITIC Telecom International, you can compare the effects of market volatilities on TRAVEL + 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 TRAVEL + with a short position of CITIC Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRAVEL + and CITIC Telecom.

Diversification Opportunities for TRAVEL + and CITIC Telecom

0.09

Correlation Coefficient

TRAVEL +  CITIC Telecom

Significant diversification

The 3 months correlation between TRAVEL and CITIC is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding TRAVEL LEISURE DL 01 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 TRAVEL + 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 TRAVEL LEISURE DL 01 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 TRAVEL + i.e., TRAVEL + and CITIC Telecom go up and down completely randomly.

Pair Corralation between TRAVEL + and CITIC Telecom

Assuming the 90 days trading horizon TRAVEL LEISURE DL 01 is expected to generate 1.22 times more return on investment than CITIC Telecom. However, TRAVEL + is 1.22 times more volatile than CITIC Telecom International. It trades about 0.12 of its potential returns per unit of risk. CITIC Telecom International is currently generating about 0.1 per unit of risk. If you would invest  5,550  in TRAVEL LEISURE DL 01 on August 30, 2025 and sell it today you would earn a total of  300.00  from holding TRAVEL LEISURE DL 01 or generate 5.41% return on investment over 90 days.

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

TRAVEL LEISURE DL 01  vs.  CITIC Telecom International

TRAVEL LEISURE DL

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in TRAVEL LEISURE DL 01 are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TRAVEL + may actually be approaching a critical reversion point that can send shares even higher in December 2025.

CITIC Telecom Intern

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CITIC Telecom International are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, CITIC Telecom is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with TRAVEL + and CITIC Telecom

The main advantage of trading using opposite TRAVEL + and CITIC Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRAVEL + 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 TRAVEL LEISURE DL 01 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.