Correlation Between China Mobile and Chongqing Brewery
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By analyzing existing cross correlation between China Mobile Limited and Chongqing Brewery Co, you can compare the effects of market volatilities on China Mobile and Chongqing Brewery 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 Chongqing Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mobile and Chongqing Brewery.
Diversification Opportunities for China Mobile and Chongqing Brewery
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Chongqing is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding China Mobile Limited and Chongqing Brewery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Brewery 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 Chongqing Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Brewery has no effect on the direction of China Mobile i.e., China Mobile and Chongqing Brewery go up and down completely randomly.
Pair Corralation between China Mobile and Chongqing Brewery
Assuming the 90 days trading horizon China Mobile Limited is expected to generate 0.58 times more return on investment than Chongqing Brewery. However, China Mobile Limited is 1.73 times less risky than Chongqing Brewery. It trades about 0.05 of its potential returns per unit of risk. Chongqing Brewery Co is currently generating about -0.02 per unit of risk. If you would invest 9,115 in China Mobile Limited on September 1, 2024 and sell it today you would earn a total of 1,523 from holding China Mobile Limited or generate 16.71% 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. Chongqing Brewery Co
Performance |
| Timeline |
| China Mobile Limited |
| Chongqing Brewery |
China Mobile and Chongqing Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Mobile and Chongqing Brewery
The main advantage of trading using opposite China Mobile and Chongqing Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mobile position performs unexpectedly, Chongqing Brewery 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 Chongqing Brewery will offset losses from the drop in Chongqing Brewery's 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 |
| Chongqing Brewery vs. BeiGene | Chongqing Brewery vs. Kweichow Moutai Co | Chongqing Brewery vs. Beijing Roborock Technology | Chongqing Brewery vs. G bits Network Technology |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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