Correlation Between CICT Mobile and Postal Savings

Can any of the company-specific risk be diversified away by investing in both CICT Mobile and Postal Savings 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 CICT Mobile and Postal Savings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CICT Mobile Communication and Postal Savings Bank, you can compare the effects of market volatilities on CICT Mobile and Postal Savings 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 CICT Mobile with a short position of Postal Savings. Check out your portfolio center. Please also check ongoing floating volatility patterns of CICT Mobile and Postal Savings.

Diversification Opportunities for CICT Mobile and Postal Savings

0.47

Correlation Coefficient

CICT Mobile  Postal Savings

Very weak diversification

The 3 months correlation between CICT and Postal is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding CICT Mobile Communication and Postal Savings Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postal Savings Bank and CICT Mobile 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 CICT Mobile Communication are associated (or correlated) with Postal Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postal Savings Bank has no effect on the direction of CICT Mobile i.e., CICT Mobile and Postal Savings go up and down completely randomly.

Pair Corralation between CICT Mobile and Postal Savings

Assuming the 90 days trading horizon CICT Mobile Communication is expected to under-perform the Postal Savings. In addition to that, CICT Mobile is 1.72 times more volatile than Postal Savings Bank. It trades about -0.02 of its total potential returns per unit of risk. Postal Savings Bank is currently generating about 0.07 per unit of volatility. If you would invest  526.00  in Postal Savings Bank on September 28, 2024 and sell it today you would earn a total of  36.00  from holding Postal Savings Bank or generate 6.84% return on investment over 90 days.

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

CICT Mobile Communication  vs.  Postal Savings Bank

CICT Mobile Communication

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CICT Mobile Communication has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CICT Mobile is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Postal Savings Bank

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Postal Savings Bank are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Postal Savings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with CICT Mobile and Postal Savings

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

The idea behind CICT Mobile Communication and Postal Savings Bank 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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.