Correlation Between China Mobile and Bank of Communications
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By analyzing existing cross correlation between China Mobile Limited and Bank of Communications, you can compare the effects of market volatilities on China Mobile and Bank of Communications 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 Bank of Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mobile and Bank of Communications.
Diversification Opportunities for China Mobile and Bank of Communications
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Bank is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding China Mobile Limited and Bank of Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Communications 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 Bank of Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Communications has no effect on the direction of China Mobile i.e., China Mobile and Bank of Communications go up and down completely randomly.
Pair Corralation between China Mobile and Bank of Communications
Assuming the 90 days trading horizon China Mobile Limited is expected to generate 1.09 times more return on investment than Bank of Communications. However, China Mobile is 1.09 times more volatile than Bank of Communications. It trades about 0.06 of its potential returns per unit of risk. Bank of Communications is currently generating about -0.08 per unit of risk. If you would invest 10,229 in China Mobile Limited on August 28, 2024 and sell it today you would earn a total of 141.00 from holding China Mobile Limited or generate 1.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Mobile Limited vs. Bank of Communications
Performance |
| Timeline |
| China Mobile Limited |
| Bank of Communications |
China Mobile and Bank of Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Mobile and Bank of Communications
The main advantage of trading using opposite China Mobile and Bank of Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mobile position performs unexpectedly, Bank of Communications 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 Bank of Communications will offset losses from the drop in Bank of Communications' long position.| China Mobile vs. Chongqing Shunbo Aluminum | China Mobile vs. Haima Automobile Group | China Mobile vs. Changchun Faway Automobile | China Mobile vs. Sunwave Communications Co |
| Bank of Communications vs. Bank of China | Bank of Communications vs. PetroChina Co Ltd | Bank of Communications vs. Ping An Insurance | Bank of Communications 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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