Correlation Between China Mobile and Dazhong Transportation
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By analyzing existing cross correlation between China Mobile Limited and Dazhong Transportation Group, you can compare the effects of market volatilities on China Mobile and Dazhong Transportation 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 Dazhong Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mobile and Dazhong Transportation.
Diversification Opportunities for China Mobile and Dazhong Transportation
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and Dazhong is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding China Mobile Limited and Dazhong Transportation Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dazhong Transportation 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 Dazhong Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dazhong Transportation has no effect on the direction of China Mobile i.e., China Mobile and Dazhong Transportation go up and down completely randomly.
Pair Corralation between China Mobile and Dazhong Transportation
Assuming the 90 days trading horizon China Mobile Limited is expected to under-perform the Dazhong Transportation. But the stock apears to be less risky and, when comparing its historical volatility, China Mobile Limited is 2.18 times less risky than Dazhong Transportation. The stock trades about -0.01 of its potential returns per unit of risk. The Dazhong Transportation Group is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 22.00 in Dazhong Transportation Group on November 6, 2024 and sell it today you would earn a total of 1.00 from holding Dazhong Transportation Group or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Mobile Limited vs. Dazhong Transportation Group
Performance |
| Timeline |
| China Mobile Limited |
| Dazhong Transportation |
China Mobile and Dazhong Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Mobile and Dazhong Transportation
The main advantage of trading using opposite China Mobile and Dazhong Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mobile position performs unexpectedly, Dazhong Transportation 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 Dazhong Transportation will offset losses from the drop in Dazhong Transportation's long position.| China Mobile vs. ButOne Information Corp | China Mobile vs. Sublime China Information | China Mobile vs. Bonree Data Technology | China Mobile vs. Anhui Transport Consulting |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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