Correlation Between China Mobile and CapitaLand Investment
Can any of the company-specific risk be diversified away by investing in both China Mobile and CapitaLand Investment 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 CapitaLand Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Mobile Limited and CapitaLand Investment Limited, you can compare the effects of market volatilities on China Mobile and CapitaLand Investment 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 CapitaLand Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mobile and CapitaLand Investment.
Diversification Opportunities for China Mobile and CapitaLand Investment
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and CapitaLand is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding China Mobile Limited and CapitaLand Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CapitaLand Investment 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 CapitaLand Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CapitaLand Investment has no effect on the direction of China Mobile i.e., China Mobile and CapitaLand Investment go up and down completely randomly.
Pair Corralation between China Mobile and CapitaLand Investment
If you would invest 856.00 in China Mobile Limited on September 1, 2024 and sell it today you would earn a total of 0.00 from holding China Mobile Limited or generate 0.0% 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. CapitaLand Investment Limited
Performance |
| Timeline |
| China Mobile Limited |
| CapitaLand Investment |
China Mobile and CapitaLand Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Mobile and CapitaLand Investment
The main advantage of trading using opposite China Mobile and CapitaLand Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mobile position performs unexpectedly, CapitaLand Investment 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 CapitaLand Investment will offset losses from the drop in CapitaLand Investment's long position.| China Mobile vs. CapitaLand Investment Limited | China Mobile vs. EAT WELL INVESTMENT | China Mobile vs. Gladstone Investment | China Mobile vs. PennyMac Mortgage Investment |
| CapitaLand Investment vs. CBRE Group Class | CapitaLand Investment vs. Superior Plus Corp | CapitaLand Investment vs. NMI Holdings | CapitaLand Investment vs. Origin Agritech |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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