Correlation Between China Mobile and China Railway
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By analyzing existing cross correlation between China Mobile Limited and China Railway Group, you can compare the effects of market volatilities on China Mobile and China Railway 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 Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mobile and China Railway.
Diversification Opportunities for China Mobile and China Railway
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and China is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding China Mobile Limited and China Railway Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Railway Group 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 Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Railway Group has no effect on the direction of China Mobile i.e., China Mobile and China Railway go up and down completely randomly.
Pair Corralation between China Mobile and China Railway
Assuming the 90 days trading horizon China Mobile Limited is expected to generate 0.51 times more return on investment than China Railway. However, China Mobile Limited is 1.97 times less risky than China Railway. It trades about 0.05 of its potential returns per unit of risk. China Railway Group is currently generating about -0.05 per unit of risk. If you would invest 10,229 in China Mobile Limited on August 27, 2024 and sell it today you would earn a total of 111.00 from holding China Mobile Limited or generate 1.09% 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. China Railway Group
Performance |
| Timeline |
| China Mobile Limited |
| China Railway Group |
China Mobile and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Mobile and China Railway
The main advantage of trading using opposite China Mobile and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mobile position performs unexpectedly, China Railway 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 Railway will offset losses from the drop in China Railway's 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 |
| China Railway vs. Hoshine Silicon Ind | China Railway vs. Glodon Software Co | China Railway vs. Tianjin Ruixin Technology | China Railway vs. Linewell Software Co |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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