Correlation Between MUTUIONLINE and China Communications
Can any of the company-specific risk be diversified away by investing in both MUTUIONLINE and China Communications 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 MUTUIONLINE and China Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MUTUIONLINE and China Communications Services, you can compare the effects of market volatilities on MUTUIONLINE and China Communications 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 MUTUIONLINE with a short position of China Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of MUTUIONLINE and China Communications.
Diversification Opportunities for MUTUIONLINE and China Communications
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MUTUIONLINE and China is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding MUTUIONLINE and China Communications Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Communications and MUTUIONLINE 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 MUTUIONLINE are associated (or correlated) with China Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Communications has no effect on the direction of MUTUIONLINE i.e., MUTUIONLINE and China Communications go up and down completely randomly.
Pair Corralation between MUTUIONLINE and China Communications
Assuming the 90 days trading horizon MUTUIONLINE is expected to generate 1.33 times less return on investment than China Communications. In addition to that, MUTUIONLINE is 1.33 times more volatile than China Communications Services. It trades about 0.06 of its total potential returns per unit of risk. China Communications Services is currently generating about 0.11 per unit of volatility. If you would invest 48.00 in China Communications Services on October 11, 2024 and sell it today you would earn a total of 3.00 from holding China Communications Services or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.44% |
| Values | Daily Returns |
MUTUIONLINE vs. China Communications Services
Performance |
| Timeline |
| MUTUIONLINE |
| China Communications |
MUTUIONLINE and China Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MUTUIONLINE and China Communications
The main advantage of trading using opposite MUTUIONLINE and China Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MUTUIONLINE position performs unexpectedly, China Communications 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 Communications will offset losses from the drop in China Communications' long position.| MUTUIONLINE vs. CITY OFFICE REIT | MUTUIONLINE vs. SBI Insurance Group | MUTUIONLINE vs. The Hanover Insurance | MUTUIONLINE vs. Corporate Office Properties |
| China Communications vs. SINGAPORE AIRLINES | China Communications vs. Aegean Airlines SA | China Communications vs. JIAHUA STORES | China Communications vs. Nok Airlines PCL |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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