Correlation Between China Mobile and Retail Estates
Can any of the company-specific risk be diversified away by investing in both China Mobile and Retail Estates 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 Mobile and Retail Estates into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Life Insurance and Retail Estates NV, you can compare the effects of market volatilities on China Mobile and Retail Estates 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 Retail Estates. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mobile and Retail Estates.
Diversification Opportunities for China Mobile and Retail Estates
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and Retail is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Retail Estates NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retail Estates NV 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 Life Insurance are associated (or correlated) with Retail Estates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retail Estates NV has no effect on the direction of China Mobile i.e., China Mobile and Retail Estates go up and down completely randomly.
Pair Corralation between China Mobile and Retail Estates
Assuming the 90 days horizon China Life Insurance is expected to under-perform the Retail Estates. In addition to that, China Mobile is 1.28 times more volatile than Retail Estates NV. It trades about -0.18 of its total potential returns per unit of risk. Retail Estates NV is currently generating about -0.07 per unit of volatility. If you would invest 5,780 in Retail Estates NV on October 24, 2024 and sell it today you would lose (80.00) from holding Retail Estates NV or give up 1.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Life Insurance vs. Retail Estates NV
Performance |
| Timeline |
| China Life Insurance |
| Retail Estates NV |
China Mobile and Retail Estates Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Mobile and Retail Estates
The main advantage of trading using opposite China Mobile and Retail Estates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mobile position performs unexpectedly, Retail Estates 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 Retail Estates will offset losses from the drop in Retail Estates' long position.| China Mobile vs. Ping An Insurance | China Mobile vs. AIA Group Limited | China Mobile vs. MetLife | China Mobile vs. Prudential plc |
| Retail Estates vs. Simon Property Group | Retail Estates vs. Realty Income | Retail Estates vs. Link Real Estate | Retail Estates vs. Range Resources 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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