Correlation Between China Mobile and FDC International
Can any of the company-specific risk be diversified away by investing in both China Mobile and FDC International 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 China Mobile and FDC International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Mobile and FDC International Hotels, you can compare the effects of market volatilities on China Mobile and FDC International 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 Mobile with a short position of FDC International. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mobile and FDC International.
Diversification Opportunities for China Mobile and FDC International
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and FDC is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding China Mobile and FDC International Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FDC International Hotels and China 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 China Mobile are associated (or correlated) with FDC International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FDC International Hotels has no effect on the direction of China Mobile i.e., China Mobile and FDC International go up and down completely randomly.
Pair Corralation between China Mobile and FDC International
Assuming the 90 days trading horizon China Mobile is expected to generate 0.59 times more return on investment than FDC International. However, China Mobile is 1.71 times less risky than FDC International. It trades about -0.04 of its potential returns per unit of risk. FDC International Hotels is currently generating about -0.04 per unit of risk. If you would invest 1,535 in China Mobile on August 31, 2024 and sell it today you would lose (180.00) from holding China Mobile or give up 11.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 48.91% |
| Values | Daily Returns |
China Mobile vs. FDC International Hotels
Performance |
| Timeline |
| China Mobile |
| FDC International Hotels |
China Mobile and FDC International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Mobile and FDC International
The main advantage of trading using opposite China Mobile and FDC International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mobile position performs unexpectedly, FDC International 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 FDC International will offset losses from the drop in FDC International's long position.| China Mobile vs. Taiwan Semiconductor Manufacturing | China Mobile vs. Hon Hai Precision | China Mobile vs. MediaTek | China Mobile vs. Chunghwa Telecom Co |
| FDC International vs. Formosa International Hotels | FDC International vs. My Humble House | FDC International vs. Wanhwa Enterprise Co | FDC International vs. Gourmet Master Co |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |