Correlation Between Shanghai Pudong and China Mobile
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By analyzing existing cross correlation between Shanghai Pudong Development and China Mobile Limited, you can compare the effects of market volatilities on Shanghai Pudong 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 Shanghai Pudong with a short position of China Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Pudong and China Mobile.
Diversification Opportunities for Shanghai Pudong and China Mobile
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shanghai and China is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Pudong Development and China Mobile Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Mobile Limited and Shanghai Pudong 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 Shanghai Pudong Development 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 Limited has no effect on the direction of Shanghai Pudong i.e., Shanghai Pudong and China Mobile go up and down completely randomly.
Pair Corralation between Shanghai Pudong and China Mobile
Assuming the 90 days trading horizon Shanghai Pudong is expected to generate 1.17 times less return on investment than China Mobile. But when comparing it to its historical volatility, Shanghai Pudong Development is 1.56 times less risky than China Mobile. It trades about 0.06 of its potential returns per unit of risk. China Mobile Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 7,603 in China Mobile Limited on August 26, 2024 and sell it today you would earn a total of 2,737 from holding China Mobile Limited or generate 36.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Pudong Development vs. China Mobile Limited
Performance |
| Timeline |
| Shanghai Pudong Deve |
| China Mobile Limited |
Shanghai Pudong and China Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Pudong and China Mobile
The main advantage of trading using opposite Shanghai Pudong and China Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Pudong 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.| Shanghai Pudong vs. Fujian Longzhou Transportation | Shanghai Pudong vs. Tianshui Huatian Technology | Shanghai Pudong vs. Western Superconducting Tech | Shanghai Pudong vs. Saurer Intelligent Technology |
| China Mobile vs. Chengdu Kanghua Biological | China Mobile vs. Beijing Wantai Biological | China Mobile vs. Suzhou Novoprotein Scientific | China Mobile vs. Aluminum Corp of |
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 CEOs Directory module to screen CEOs from public companies around the world.
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