Correlation Between China Mobile and China Petroleum
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By analyzing existing cross correlation between China Mobile Limited and China Petroleum Chemical, you can compare the effects of market volatilities on China Mobile and China Petroleum 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 Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mobile and China Petroleum.
Diversification Opportunities for China Mobile and China Petroleum
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and China is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding China Mobile Limited and China Petroleum Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Petroleum Chemical 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 Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Petroleum Chemical has no effect on the direction of China Mobile i.e., China Mobile and China Petroleum go up and down completely randomly.
Pair Corralation between China Mobile and China Petroleum
Assuming the 90 days trading horizon China Mobile Limited is expected to generate 1.05 times more return on investment than China Petroleum. However, China Mobile is 1.05 times more volatile than China Petroleum Chemical. It trades about -0.02 of its potential returns per unit of risk. China Petroleum Chemical is currently generating about -0.15 per unit of risk. If you would invest 10,435 in China Mobile Limited on August 24, 2024 and sell it today you would lose (78.00) from holding China Mobile Limited or give up 0.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Mobile Limited vs. China Petroleum Chemical
Performance |
| Timeline |
| China Mobile Limited |
| China Petroleum Chemical |
China Mobile and China Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Mobile and China Petroleum
The main advantage of trading using opposite China Mobile and China Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mobile position performs unexpectedly, China Petroleum 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 Petroleum will offset losses from the drop in China Petroleum's long position.| China Mobile vs. Fuzhou Rockchip Electronics | China Mobile vs. Jiangsu Yueda Investment | China Mobile vs. Offshore Oil Engineering | China Mobile vs. Hunan Investment Group |
| China Petroleum vs. Dymatic Chemicals | China Petroleum vs. Shandong Ruifeng Chemical | China Petroleum vs. Liuzhou Chemical Industry | China Petroleum vs. Shanghai Yaoji Playing |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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