Correlation Between Citic Telecom and CAMECO

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

Diversification Opportunities for Citic Telecom and CAMECO

0.68

Correlation Coefficient

Citic Telecom  CAMECO

Poor diversification

The 3 months correlation between Citic and CAMECO is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Citic Telecom International and CAMECO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAMECO 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 CAMECO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAMECO has no effect on the direction of Citic Telecom i.e., Citic Telecom and CAMECO go up and down completely randomly.

Pair Corralation between Citic Telecom and CAMECO

Assuming the 90 days trading horizon Citic Telecom is expected to generate 4.84 times less return on investment than CAMECO. But when comparing it to its historical volatility, Citic Telecom International is 1.14 times less risky than CAMECO. It trades about 0.09 of its potential returns per unit of risk. CAMECO is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest  3,607  in CAMECO on April 23, 2025 and sell it today you would earn a total of  3,243  from holding CAMECO or generate 89.91% 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.  CAMECO

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. In spite of comparatively fragile basic indicators, Citic Telecom unveiled solid returns over the last few months and may actually be approaching a breakup point.

CAMECO

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in CAMECO are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, CAMECO exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Citic Telecom and CAMECO

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

The idea behind Citic Telecom International and CAMECO 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.