Correlation Between China Mobile and Huadong Medicine
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By analyzing existing cross correlation between China Mobile Limited and Huadong Medicine Co, you can compare the effects of market volatilities on China Mobile and Huadong Medicine 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 Mobile with a short position of Huadong Medicine. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mobile and Huadong Medicine.
Diversification Opportunities for China Mobile and Huadong Medicine
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Huadong is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding China Mobile Limited and Huadong Medicine Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huadong Medicine and China Mobile 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 Mobile Limited are associated (or correlated) with Huadong Medicine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huadong Medicine has no effect on the direction of China Mobile i.e., China Mobile and Huadong Medicine go up and down completely randomly.
Pair Corralation between China Mobile and Huadong Medicine
Assuming the 90 days trading horizon China Mobile Limited is expected to generate 0.88 times more return on investment than Huadong Medicine. However, China Mobile Limited is 1.14 times less risky than Huadong Medicine. It trades about 0.06 of its potential returns per unit of risk. Huadong Medicine Co is currently generating about -0.02 per unit of risk. If you would invest 7,250 in China Mobile Limited on September 26, 2024 and sell it today you would earn a total of 4,239 from holding China Mobile Limited or generate 58.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
China Mobile Limited vs. Huadong Medicine Co
Performance |
| Timeline |
| China Mobile Limited |
| Huadong Medicine |
China Mobile and Huadong Medicine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Mobile and Huadong Medicine
The main advantage of trading using opposite China Mobile and Huadong Medicine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mobile position performs unexpectedly, Huadong Medicine 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 Huadong Medicine will offset losses from the drop in Huadong Medicine's long position.| China Mobile vs. Chengdu Kanghua Biological | China Mobile vs. Beijing Wantai Biological | China Mobile vs. Suzhou Novoprotein Scientific | China Mobile vs. COL Digital Publishing |
| Huadong Medicine vs. Industrial and Commercial | Huadong Medicine vs. Kweichow Moutai Co | Huadong Medicine vs. Agricultural Bank of | Huadong Medicine vs. China Mobile Limited |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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