Correlation Between China Mobile and Chengdu Kanghua
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By analyzing existing cross correlation between China Mobile Limited and Chengdu Kanghua Biological, you can compare the effects of market volatilities on China Mobile and Chengdu Kanghua 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 Chengdu Kanghua. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mobile and Chengdu Kanghua.
Diversification Opportunities for China Mobile and Chengdu Kanghua
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Chengdu is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding China Mobile Limited and Chengdu Kanghua Biological in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Kanghua Biol 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 Chengdu Kanghua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Kanghua Biol has no effect on the direction of China Mobile i.e., China Mobile and Chengdu Kanghua go up and down completely randomly.
Pair Corralation between China Mobile and Chengdu Kanghua
Assuming the 90 days trading horizon China Mobile Limited is expected to generate 0.46 times more return on investment than Chengdu Kanghua. However, China Mobile Limited is 2.16 times less risky than Chengdu Kanghua. It trades about 0.03 of its potential returns per unit of risk. Chengdu Kanghua Biological is currently generating about 0.0 per unit of risk. If you would invest 9,690 in China Mobile Limited on August 31, 2024 and sell it today you would earn a total of 948.00 from holding China Mobile Limited or generate 9.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Mobile Limited vs. Chengdu Kanghua Biological
Performance |
| Timeline |
| China Mobile Limited |
| Chengdu Kanghua Biol |
China Mobile and Chengdu Kanghua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Mobile and Chengdu Kanghua
The main advantage of trading using opposite China Mobile and Chengdu Kanghua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mobile position performs unexpectedly, Chengdu Kanghua 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 Chengdu Kanghua will offset losses from the drop in Chengdu Kanghua's long position.| China Mobile vs. BYD Co Ltd | China Mobile vs. Agricultural Bank of | China Mobile vs. Industrial and Commercial | China Mobile vs. China State Construction |
| Chengdu Kanghua vs. Hainan Mining Co | Chengdu Kanghua vs. Shandong Mining Machinery | Chengdu Kanghua vs. JCHX Mining Management | Chengdu Kanghua vs. Tibet Huayu Mining |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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