Correlation Between China Resources and T-Mobile
Can any of the company-specific risk be diversified away by investing in both China Resources and T-Mobile at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining China Resources and T-Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Resources Beer and T Mobile, you can compare the effects of market volatilities on China Resources and T-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 Resources with a short position of T-Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Resources and T-Mobile.
Diversification Opportunities for China Resources and T-Mobile
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and T-Mobile is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding China Resources Beer and T Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Mobile and China Resources 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 Resources Beer are associated (or correlated) with T-Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Mobile has no effect on the direction of China Resources i.e., China Resources and T-Mobile go up and down completely randomly.
Pair Corralation between China Resources and T-Mobile
Assuming the 90 days horizon China Resources Beer is expected to under-perform the T-Mobile. In addition to that, China Resources is 2.21 times more volatile than T Mobile. It trades about -0.02 of its total potential returns per unit of risk. T Mobile is currently generating about 0.07 per unit of volatility. If you would invest 12,974 in T Mobile on October 11, 2024 and sell it today you would earn a total of 7,331 from holding T Mobile or generate 56.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Resources Beer vs. T Mobile
Performance |
| Timeline |
| China Resources Beer |
| T Mobile |
China Resources and T-Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Resources and T-Mobile
The main advantage of trading using opposite China Resources and T-Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Resources position performs unexpectedly, T-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 T-Mobile will offset losses from the drop in T-Mobile's long position.| China Resources vs. Aluminum of | China Resources vs. Penta Ocean Construction Co | China Resources vs. SIERRA METALS | China Resources vs. Daito Trust Construction |
| T-Mobile vs. BOSTON BEER A | T-Mobile vs. China Resources Beer | T-Mobile vs. Japan Asia Investment | T-Mobile vs. Apollo Investment Corp |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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