Correlation Between DAIDO METAL and CITIC Telecom

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

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

Diversification Opportunities for DAIDO METAL and CITIC Telecom

0.65

Correlation Coefficient

DAIDO METAL  CITIC Telecom

Poor diversification

The 3 months correlation between DAIDO and CITIC is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding DAIDO METAL TD 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 DAIDO METAL 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 DAIDO METAL TD 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 DAIDO METAL i.e., DAIDO METAL and CITIC Telecom go up and down completely randomly.

Pair Corralation between DAIDO METAL and CITIC Telecom

Assuming the 90 days horizon DAIDO METAL TD is expected to generate 0.8 times more return on investment than CITIC Telecom. However, DAIDO METAL TD is 1.25 times less risky than CITIC Telecom. It trades about 0.16 of its potential returns per unit of risk. CITIC Telecom International is currently generating about 0.09 per unit of risk. If you would invest  276.00  in DAIDO METAL TD on April 20, 2025 and sell it today you would earn a total of  90.00  from holding DAIDO METAL TD or generate 32.61% return on investment over 90 days.

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

DAIDO METAL TD  vs.  CITIC Telecom International

DAIDO METAL TD

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DAIDO METAL TD are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, DAIDO METAL reported solid returns over the last few months and may actually be approaching a breakup point.

CITIC Telecom Intern

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CITIC Telecom International are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CITIC Telecom reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DAIDO METAL and CITIC Telecom

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

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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.