Correlation Between China Mobile and CITIC Telecom
Can any of the company-specific risk be diversified away by investing in both China Mobile and CITIC Telecom 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 CITIC Telecom 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 CITIC Telecom International, you can compare the effects of market volatilities on China Mobile and CITIC Telecom 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 CITIC Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mobile and CITIC Telecom.
Diversification Opportunities for China Mobile and CITIC Telecom
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between China and CITIC is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding China Mobile Limited and CITIC Telecom International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC Telecom Intern 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 CITIC Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC Telecom Intern has no effect on the direction of China Mobile i.e., China Mobile and CITIC Telecom go up and down completely randomly.
Pair Corralation between China Mobile and CITIC Telecom
Assuming the 90 days horizon China Mobile is expected to generate 2.14 times less return on investment than CITIC Telecom. But when comparing it to its historical volatility, China Mobile Limited is 2.77 times less risky than CITIC Telecom. It trades about 0.12 of its potential returns per unit of risk. CITIC Telecom International is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 9.53 in CITIC Telecom International on September 24, 2024 and sell it today you would earn a total of 19.47 from holding CITIC Telecom International or generate 204.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.41% |
| Values | Daily Returns |
China Mobile Limited vs. CITIC Telecom International
Performance |
| Timeline |
| China Mobile Limited |
| CITIC Telecom Intern |
China Mobile and CITIC Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Mobile and CITIC Telecom
The main advantage of trading using opposite China Mobile and CITIC Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mobile position performs unexpectedly, CITIC Telecom 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 CITIC Telecom will offset losses from the drop in CITIC Telecom's long position.| China Mobile vs. T Mobile | China Mobile vs. Verizon Communications | China Mobile vs. ATT Inc | China Mobile vs. ATT Inc |
| CITIC Telecom vs. T Mobile | CITIC Telecom vs. China Mobile Limited | CITIC Telecom vs. Verizon Communications | CITIC Telecom vs. ATT Inc |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |