Correlation Between Axiomtek and China Mobile
Can any of the company-specific risk be diversified away by investing in both Axiomtek 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 Axiomtek and China Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axiomtek Co and China Mobile, you can compare the effects of market volatilities on Axiomtek 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 Axiomtek with a short position of China Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axiomtek and China Mobile.
Diversification Opportunities for Axiomtek and China Mobile
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Axiomtek and China is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Axiomtek Co and China Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Mobile and Axiomtek 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 Axiomtek Co 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 Axiomtek i.e., Axiomtek and China Mobile go up and down completely randomly.
Pair Corralation between Axiomtek and China Mobile
Assuming the 90 days trading horizon Axiomtek Co is expected to generate 31.29 times more return on investment than China Mobile. However, Axiomtek is 31.29 times more volatile than China Mobile. It trades about 0.05 of its potential returns per unit of risk. China Mobile is currently generating about -0.03 per unit of risk. If you would invest 5,020 in Axiomtek Co on September 14, 2024 and sell it today you would earn a total of 5,880 from holding Axiomtek Co or generate 117.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 39.46% |
| Values | Daily Returns |
Axiomtek Co vs. China Mobile
Performance |
| Timeline |
| Axiomtek |
| China Mobile |
Axiomtek and China Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axiomtek and China Mobile
The main advantage of trading using opposite Axiomtek and China Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axiomtek 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.| Axiomtek vs. Chinese Maritime Transport | Axiomtek vs. Galaxy Software Services | Axiomtek vs. Shan Loong Transportation Co | Axiomtek vs. Sporton International |
| China Mobile vs. RDC Semiconductor Co | China Mobile vs. Niko Semiconductor Co | China Mobile vs. Grand Pacific Petrochemical | China Mobile vs. Mechema Chemicals Int |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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