Correlation Between China Mobile and CHINA DEVELOPMENT
Can any of the company-specific risk be diversified away by investing in both China Mobile and CHINA DEVELOPMENT 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 CHINA DEVELOPMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Mobile and CHINA DEVELOPMENT FINANCIAL, you can compare the effects of market volatilities on China Mobile and CHINA DEVELOPMENT 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 CHINA DEVELOPMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mobile and CHINA DEVELOPMENT.
Diversification Opportunities for China Mobile and CHINA DEVELOPMENT
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and CHINA is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding China Mobile and CHINA DEVELOPMENT FINANCIAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA DEVELOPMENT 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 CHINA DEVELOPMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA DEVELOPMENT has no effect on the direction of China Mobile i.e., China Mobile and CHINA DEVELOPMENT go up and down completely randomly.
Pair Corralation between China Mobile and CHINA DEVELOPMENT
Assuming the 90 days trading horizon China Mobile is expected to generate 1.85 times more return on investment than CHINA DEVELOPMENT. However, China Mobile is 1.85 times more volatile than CHINA DEVELOPMENT FINANCIAL. It trades about 0.14 of its potential returns per unit of risk. CHINA DEVELOPMENT FINANCIAL is currently generating about -0.07 per unit of risk. If you would invest 1,364 in China Mobile on September 4, 2024 and sell it today you would earn a total of 44.00 from holding China Mobile or generate 3.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Mobile vs. CHINA DEVELOPMENT FINANCIAL
Performance |
| Timeline |
| China Mobile |
| CHINA DEVELOPMENT |
China Mobile and CHINA DEVELOPMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Mobile and CHINA DEVELOPMENT
The main advantage of trading using opposite China Mobile and CHINA DEVELOPMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mobile position performs unexpectedly, CHINA DEVELOPMENT 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 DEVELOPMENT will offset losses from the drop in CHINA DEVELOPMENT'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 |
| CHINA DEVELOPMENT vs. Arbor Technology | CHINA DEVELOPMENT vs. China Mobile | CHINA DEVELOPMENT vs. Newretail Co | CHINA DEVELOPMENT vs. Posiflex Technology |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |