Correlation Between Strong H and China Mobile
Can any of the company-specific risk be diversified away by investing in both Strong H 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 Strong H and China Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strong H Machinery and China Mobile, you can compare the effects of market volatilities on Strong H 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 Strong H with a short position of China Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strong H and China Mobile.
Diversification Opportunities for Strong H and China Mobile
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Strong and China is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Strong H Machinery and China Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Mobile and Strong H 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 Strong H Machinery 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 Strong H i.e., Strong H and China Mobile go up and down completely randomly.
Pair Corralation between Strong H and China Mobile
Assuming the 90 days trading horizon Strong H Machinery is expected to generate 0.59 times more return on investment than China Mobile. However, Strong H Machinery is 1.68 times less risky than China Mobile. It trades about 0.0 of its potential returns per unit of risk. China Mobile is currently generating about -0.03 per unit of risk. If you would invest 3,551 in Strong H Machinery on October 16, 2024 and sell it today you would lose (101.00) from holding Strong H Machinery or give up 2.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 43.51% |
| Values | Daily Returns |
Strong H Machinery vs. China Mobile
Performance |
| Timeline |
| Strong H Machinery |
| China Mobile |
Strong H and China Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strong H and China Mobile
The main advantage of trading using opposite Strong H and China Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strong H 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.| Strong H vs. Hiwin Technologies Corp | Strong H vs. Brighton Best International Taiwan | Strong H vs. San Shing Fastech | Strong H vs. QST International |
| China Mobile vs. An Shin Food Services | China Mobile vs. Huang Hsiang Construction | China Mobile vs. Strong H Machinery | China Mobile vs. Highwealth Construction Corp |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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