Correlation Between GWILLI FOOD and China Mobile
Can any of the company-specific risk be diversified away by investing in both GWILLI FOOD and China 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 GWILLI FOOD and China Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GWILLI FOOD and China Life Insurance, you can compare the effects of market volatilities on GWILLI FOOD and China 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 GWILLI FOOD with a short position of China Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of GWILLI FOOD and China Mobile.
Diversification Opportunities for GWILLI FOOD and China Mobile
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GWILLI and China is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding GWILLI FOOD and China Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Life Insurance and GWILLI FOOD 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 GWILLI FOOD are associated (or correlated) with China Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Life Insurance has no effect on the direction of GWILLI FOOD i.e., GWILLI FOOD and China Mobile go up and down completely randomly.
Pair Corralation between GWILLI FOOD and China Mobile
Assuming the 90 days trading horizon GWILLI FOOD is expected to generate 2.01 times less return on investment than China Mobile. But when comparing it to its historical volatility, GWILLI FOOD is 1.65 times less risky than China Mobile. It trades about 0.1 of its potential returns per unit of risk. China Life Insurance is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 64.00 in China Life Insurance on October 25, 2024 and sell it today you would earn a total of 102.00 from holding China Life Insurance or generate 159.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GWILLI FOOD vs. China Life Insurance
Performance |
| Timeline |
| GWILLI FOOD |
| China Life Insurance |
GWILLI FOOD and China Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GWILLI FOOD and China Mobile
The main advantage of trading using opposite GWILLI FOOD and China Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GWILLI FOOD position performs unexpectedly, China 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 China Mobile will offset losses from the drop in China Mobile's long position.| GWILLI FOOD vs. Titan Machinery | GWILLI FOOD vs. Australian Agricultural | GWILLI FOOD vs. Penta Ocean Construction Co | GWILLI FOOD vs. Major Drilling Group |
| China Mobile vs. Nexstar Media Group | China Mobile vs. Dave Busters Entertainment | China Mobile vs. PARKEN Sport Entertainment | China Mobile vs. Teradata 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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