Correlation Between China Petroleum and China Mobile
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By analyzing existing cross correlation between China Petroleum Chemical and China Mobile Limited, you can compare the effects of market volatilities on China Petroleum 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 China Petroleum with a short position of China Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Petroleum and China Mobile.
Diversification Opportunities for China Petroleum and China Mobile
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and China is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding China Petroleum Chemical 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 China Petroleum 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 Petroleum Chemical 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 China Petroleum i.e., China Petroleum and China Mobile go up and down completely randomly.
Pair Corralation between China Petroleum and China Mobile
Assuming the 90 days trading horizon China Petroleum Chemical is expected to under-perform the China Mobile. But the stock apears to be less risky and, when comparing its historical volatility, China Petroleum Chemical is 1.05 times less risky than China Mobile. The stock trades about -0.15 of its potential returns per unit of risk. The China Mobile Limited is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 10,435 in China Mobile Limited on August 24, 2024 and sell it today you would lose (78.00) from holding China Mobile Limited or give up 0.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Petroleum Chemical vs. China Mobile Limited
Performance |
| Timeline |
| China Petroleum Chemical |
| China Mobile Limited |
China Petroleum and China Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Petroleum and China Mobile
The main advantage of trading using opposite China Petroleum and China Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Petroleum 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.| China Petroleum vs. Dymatic Chemicals | China Petroleum vs. Shandong Ruifeng Chemical | China Petroleum vs. Liuzhou Chemical Industry | China Petroleum vs. Shanghai Yaoji Playing |
| China Mobile vs. Fuzhou Rockchip Electronics | China Mobile vs. Jiangsu Yueda Investment | China Mobile vs. Offshore Oil Engineering | China Mobile vs. Hunan Investment Group |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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