Correlation Between China Mobile and GameStop Corp
Can any of the company-specific risk be diversified away by investing in both China Mobile and GameStop Corp 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 GameStop Corp 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 GameStop Corp, you can compare the effects of market volatilities on China Mobile and GameStop Corp 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 GameStop Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mobile and GameStop Corp.
Diversification Opportunities for China Mobile and GameStop Corp
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between China and GameStop is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding China Mobile Limited and GameStop Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GameStop Corp 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 GameStop Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GameStop Corp has no effect on the direction of China Mobile i.e., China Mobile and GameStop Corp go up and down completely randomly.
Pair Corralation between China Mobile and GameStop Corp
Assuming the 90 days horizon China Mobile is expected to generate 1.59 times less return on investment than GameStop Corp. But when comparing it to its historical volatility, China Mobile Limited is 2.87 times less risky than GameStop Corp. It trades about 0.11 of its potential returns per unit of risk. GameStop Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,637 in GameStop Corp on September 12, 2024 and sell it today you would earn a total of 1,055 from holding GameStop Corp or generate 64.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
China Mobile Limited vs. GameStop Corp
Performance |
| Timeline |
| China Mobile Limited |
| GameStop Corp |
China Mobile and GameStop Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Mobile and GameStop Corp
The main advantage of trading using opposite China Mobile and GameStop Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mobile position performs unexpectedly, GameStop Corp 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 GameStop Corp will offset losses from the drop in GameStop Corp's long position.| China Mobile vs. GameStop Corp | China Mobile vs. SHIN ETSU CHEMICAL | China Mobile vs. Mitsubishi Gas Chemical | China Mobile vs. PENN NATL GAMING |
| GameStop Corp vs. Superior Plus Corp | GameStop Corp vs. SIVERS SEMICONDUCTORS AB | GameStop Corp vs. NorAm Drilling AS | GameStop Corp vs. Norsk Hydro ASA |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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