Correlation Between China Life and China Mobile
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By analyzing existing cross correlation between China Life Insurance and China Mobile Limited, you can compare the effects of market volatilities on China Life and China Mobile 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 Life with a short position of China Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and China Mobile.
Diversification Opportunities for China Life and China Mobile
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and China is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and China Mobile Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Mobile Limited and China Life 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 Life Insurance are associated (or correlated) with China Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Mobile Limited has no effect on the direction of China Life i.e., China Life and China Mobile go up and down completely randomly.
Pair Corralation between China Life and China Mobile
Assuming the 90 days trading horizon China Life is expected to generate 5.26 times less return on investment than China Mobile. In addition to that, China Life is 1.52 times more volatile than China Mobile Limited. It trades about 0.01 of its total potential returns per unit of risk. China Mobile Limited is currently generating about 0.11 per unit of volatility. If you would invest 10,370 in China Mobile Limited on October 26, 2024 and sell it today you would earn a total of 585.00 from holding China Mobile Limited or generate 5.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Life Insurance vs. China Mobile Limited
Performance |
| Timeline |
| China Life Insurance |
| China Mobile Limited |
China Life and China Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and China Mobile
The main advantage of trading using opposite China Life and China Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, China Mobile 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 Mobile will offset losses from the drop in China Mobile's long position.| China Life vs. Industrial and Commercial | China Life vs. Agricultural Bank of | China Life vs. China Construction Bank | China Life vs. Bank of China |
| China Mobile vs. Guangdong Jingyi Metal | China Mobile vs. Meinian Onehealth Healthcare | China Mobile vs. Mingchen Health Co | China Mobile vs. Shandong Hongchuang Aluminum |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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