Correlation Between China Baoan and China Mobile
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By analyzing existing cross correlation between China Baoan Group and China Mobile Limited, you can compare the effects of market volatilities on China Baoan and China Mobile 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 China Baoan with a short position of China Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Baoan and China Mobile.
Diversification Opportunities for China Baoan and China Mobile
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and China is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding China Baoan Group and China Mobile Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Mobile Limited and China Baoan 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 China Baoan Group are associated (or correlated) with China Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Mobile Limited has no effect on the direction of China Baoan i.e., China Baoan and China Mobile go up and down completely randomly.
Pair Corralation between China Baoan and China Mobile
Assuming the 90 days trading horizon China Baoan Group is expected to under-perform the China Mobile. In addition to that, China Baoan is 1.21 times more volatile than China Mobile Limited. It trades about -0.03 of its total potential returns per unit of risk. China Mobile Limited is currently generating about 0.05 per unit of volatility. If you would invest 7,623 in China Mobile Limited on November 7, 2024 and sell it today you would earn a total of 3,474 from holding China Mobile Limited or generate 45.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Baoan Group vs. China Mobile Limited
Performance |
| Timeline |
| China Baoan Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| China Mobile Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
China Baoan and China Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Baoan and China Mobile
The main advantage of trading using opposite China Baoan and China Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Baoan position performs unexpectedly, China Mobile 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 China Mobile will offset losses from the drop in China Mobile's long position.The idea behind China Baoan Group and China Mobile Limited 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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