Correlation Between China Mobile and China Asset
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By analyzing existing cross correlation between China Mobile Limited and China Asset Management, you can compare the effects of market volatilities on China Mobile and China Asset 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 China Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mobile and China Asset.
Diversification Opportunities for China Mobile and China Asset
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between China and China is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding China Mobile Limited and China Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Asset Management 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 China Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Asset Management has no effect on the direction of China Mobile i.e., China Mobile and China Asset go up and down completely randomly.
Pair Corralation between China Mobile and China Asset
Assuming the 90 days trading horizon China Mobile Limited is expected to generate 1.6 times more return on investment than China Asset. However, China Mobile is 1.6 times more volatile than China Asset Management. It trades about 0.02 of its potential returns per unit of risk. China Asset Management is currently generating about -0.01 per unit of risk. If you would invest 10,399 in China Mobile Limited on August 29, 2024 and sell it today you would earn a total of 143.00 from holding China Mobile Limited or generate 1.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Mobile Limited vs. China Asset Management
Performance |
| Timeline |
| China Mobile Limited |
| China Asset Management |
China Mobile and China Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Mobile and China Asset
The main advantage of trading using opposite China Mobile and China Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mobile position performs unexpectedly, China Asset 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 Asset will offset losses from the drop in China Asset's long position.| China Mobile vs. Industrial and Commercial | China Mobile vs. Agricultural Bank of | China Mobile vs. China Construction Bank | China Mobile vs. Bank of China |
| China Asset vs. Industrial and Commercial | China Asset vs. Kweichow Moutai Co | China Asset vs. Agricultural Bank of | China Asset 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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