Correlation Between China Mobile and Dongnan Electronics
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By analyzing existing cross correlation between China Mobile Limited and Dongnan Electronics Co, you can compare the effects of market volatilities on China Mobile and Dongnan Electronics 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 Dongnan Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mobile and Dongnan Electronics.
Diversification Opportunities for China Mobile and Dongnan Electronics
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between China and Dongnan is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding China Mobile Limited and Dongnan Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongnan Electronics 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 Dongnan Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongnan Electronics has no effect on the direction of China Mobile i.e., China Mobile and Dongnan Electronics go up and down completely randomly.
Pair Corralation between China Mobile and Dongnan Electronics
Assuming the 90 days trading horizon China Mobile is expected to generate 2.21 times less return on investment than Dongnan Electronics. But when comparing it to its historical volatility, China Mobile Limited is 4.71 times less risky than Dongnan Electronics. It trades about 0.14 of its potential returns per unit of risk. Dongnan Electronics Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,344 in Dongnan Electronics Co on September 1, 2024 and sell it today you would earn a total of 126.00 from holding Dongnan Electronics Co or generate 5.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Mobile Limited vs. Dongnan Electronics Co
Performance |
| Timeline |
| China Mobile Limited |
| Dongnan Electronics |
China Mobile and Dongnan Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Mobile and Dongnan Electronics
The main advantage of trading using opposite China Mobile and Dongnan Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mobile position performs unexpectedly, Dongnan Electronics 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 Dongnan Electronics will offset losses from the drop in Dongnan Electronics' long position.| China Mobile vs. Kweichow Moutai Co | China Mobile vs. NAURA Technology Group | China Mobile vs. APT Medical | China Mobile vs. BYD Co Ltd |
| Dongnan Electronics vs. Cultural Investment Holdings | Dongnan Electronics vs. Gome Telecom Equipment | Dongnan Electronics vs. Bus Online Co | Dongnan Electronics vs. Holitech Technology Co |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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