Correlation Between China Mobile and Xiamen Bank
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By analyzing existing cross correlation between China Mobile Limited and Xiamen Bank Co, you can compare the effects of market volatilities on China Mobile and Xiamen Bank 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 Xiamen Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mobile and Xiamen Bank.
Diversification Opportunities for China Mobile and Xiamen Bank
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Xiamen is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding China Mobile Limited and Xiamen Bank Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiamen Bank 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 Xiamen Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiamen Bank has no effect on the direction of China Mobile i.e., China Mobile and Xiamen Bank go up and down completely randomly.
Pair Corralation between China Mobile and Xiamen Bank
Assuming the 90 days trading horizon China Mobile is expected to generate 1.72 times less return on investment than Xiamen Bank. But when comparing it to its historical volatility, China Mobile Limited is 1.61 times less risky than Xiamen Bank. It trades about 0.17 of its potential returns per unit of risk. Xiamen Bank Co is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 537.00 in Xiamen Bank Co on September 12, 2024 and sell it today you would earn a total of 41.00 from holding Xiamen Bank Co or generate 7.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Mobile Limited vs. Xiamen Bank Co
Performance |
| Timeline |
| China Mobile Limited |
| Xiamen Bank |
China Mobile and Xiamen Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Mobile and Xiamen Bank
The main advantage of trading using opposite China Mobile and Xiamen Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mobile position performs unexpectedly, Xiamen Bank 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 Xiamen Bank will offset losses from the drop in Xiamen Bank's long position.| China Mobile vs. Kweichow Moutai Co | China Mobile vs. Shenzhen Mindray Bio Medical | China Mobile vs. G bits Network Technology | China Mobile vs. Beijing Roborock Technology |
| Xiamen Bank vs. China Petroleum Chemical | Xiamen Bank vs. PetroChina Co Ltd | Xiamen Bank vs. China Mobile Limited | Xiamen Bank vs. Industrial and Commercial |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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