Correlation Between China Mobile and Ningbo Fangzheng
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By analyzing existing cross correlation between China Mobile Limited and Ningbo Fangzheng Automobile, you can compare the effects of market volatilities on China Mobile and Ningbo Fangzheng 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 Ningbo Fangzheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mobile and Ningbo Fangzheng.
Diversification Opportunities for China Mobile and Ningbo Fangzheng
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Ningbo is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding China Mobile Limited and Ningbo Fangzheng Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningbo Fangzheng Aut 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 Ningbo Fangzheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningbo Fangzheng Aut has no effect on the direction of China Mobile i.e., China Mobile and Ningbo Fangzheng go up and down completely randomly.
Pair Corralation between China Mobile and Ningbo Fangzheng
Assuming the 90 days trading horizon China Mobile Limited is expected to generate 0.58 times more return on investment than Ningbo Fangzheng. However, China Mobile Limited is 1.71 times less risky than Ningbo Fangzheng. It trades about 0.06 of its potential returns per unit of risk. Ningbo Fangzheng Automobile is currently generating about -0.01 per unit of risk. If you would invest 7,072 in China Mobile Limited on September 4, 2024 and sell it today you would earn a total of 3,475 from holding China Mobile Limited or generate 49.14% 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. Ningbo Fangzheng Automobile
Performance |
| Timeline |
| China Mobile Limited |
| Ningbo Fangzheng Aut |
China Mobile and Ningbo Fangzheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Mobile and Ningbo Fangzheng
The main advantage of trading using opposite China Mobile and Ningbo Fangzheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mobile position performs unexpectedly, Ningbo Fangzheng 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 Ningbo Fangzheng will offset losses from the drop in Ningbo Fangzheng's long position.| China Mobile vs. New China Life | China Mobile vs. Ming Yang Smart | China Mobile vs. 159681 | China Mobile vs. 159005 |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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