Correlation Between China Mobile and Guangzhou Automobile
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By analyzing existing cross correlation between China Mobile Limited and Guangzhou Automobile Group, you can compare the effects of market volatilities on China Mobile and Guangzhou Automobile 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 Guangzhou Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mobile and Guangzhou Automobile.
Diversification Opportunities for China Mobile and Guangzhou Automobile
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and Guangzhou is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding China Mobile Limited and Guangzhou Automobile Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Automobile 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 Guangzhou Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Automobile has no effect on the direction of China Mobile i.e., China Mobile and Guangzhou Automobile go up and down completely randomly.
Pair Corralation between China Mobile and Guangzhou Automobile
Assuming the 90 days trading horizon China Mobile Limited is expected to generate 0.67 times more return on investment than Guangzhou Automobile. However, China Mobile Limited is 1.5 times less risky than Guangzhou Automobile. It trades about 0.05 of its potential returns per unit of risk. Guangzhou Automobile Group is currently generating about 0.01 per unit of risk. If you would invest 9,950 in China Mobile Limited on September 3, 2024 and sell it today you would earn a total of 688.00 from holding China Mobile Limited or generate 6.91% 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. Guangzhou Automobile Group
Performance |
| Timeline |
| China Mobile Limited |
| Guangzhou Automobile |
China Mobile and Guangzhou Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Mobile and Guangzhou Automobile
The main advantage of trading using opposite China Mobile and Guangzhou Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mobile position performs unexpectedly, Guangzhou Automobile 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 Guangzhou Automobile will offset losses from the drop in Guangzhou Automobile's long position.| China Mobile vs. Andon Health Co | China Mobile vs. Jiangsu Yueda Investment | China Mobile vs. Impulse Qingdao Health | China Mobile vs. Metro Investment Development |
| Guangzhou Automobile vs. PetroChina Co Ltd | Guangzhou Automobile vs. China Mobile Limited | Guangzhou Automobile vs. Industrial and Commercial | Guangzhou Automobile vs. China Life Insurance |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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