Correlation Between Huang Hsiang and China Mobile
Can any of the company-specific risk be diversified away by investing in both Huang Hsiang and China Mobile 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 Huang Hsiang and China Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huang Hsiang Construction and China Mobile, you can compare the effects of market volatilities on Huang Hsiang 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 Huang Hsiang with a short position of China Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huang Hsiang and China Mobile.
Diversification Opportunities for Huang Hsiang and China Mobile
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Huang and China is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Huang Hsiang Construction and China Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Mobile and Huang Hsiang 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 Huang Hsiang Construction 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 has no effect on the direction of Huang Hsiang i.e., Huang Hsiang and China Mobile go up and down completely randomly.
Pair Corralation between Huang Hsiang and China Mobile
Assuming the 90 days trading horizon Huang Hsiang Construction is expected to under-perform the China Mobile. In addition to that, Huang Hsiang is 2.03 times more volatile than China Mobile. It trades about -0.22 of its total potential returns per unit of risk. China Mobile is currently generating about 0.15 per unit of volatility. If you would invest 1,360 in China Mobile on October 30, 2024 and sell it today you would earn a total of 80.00 from holding China Mobile or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huang Hsiang Construction vs. China Mobile
Performance |
| Timeline |
| Huang Hsiang Construction |
| China Mobile |
Huang Hsiang and China Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huang Hsiang and China Mobile
The main advantage of trading using opposite Huang Hsiang and China Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huang Hsiang 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.| Huang Hsiang vs. Highwealth Construction Corp | Huang Hsiang vs. Huaku Development Co | Huang Hsiang vs. Kindom Construction Corp | Huang Hsiang vs. Cathay Real Estate |
| China Mobile vs. U Media Communications | China Mobile vs. X Legend Entertainment Co | China Mobile vs. De Licacy Industrial | China Mobile vs. Unique Optical Industrial |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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