Correlation Between Mobile World and Global Electrical
Can any of the company-specific risk be diversified away by investing in both Mobile World and Global Electrical 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 Mobile World and Global Electrical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mobile World Investment and Global Electrical Technology, you can compare the effects of market volatilities on Mobile World and Global Electrical 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 Mobile World with a short position of Global Electrical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobile World and Global Electrical.
Diversification Opportunities for Mobile World and Global Electrical
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mobile and Global is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Mobile World Investment and Global Electrical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Electrical and Mobile World 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 Mobile World Investment are associated (or correlated) with Global Electrical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Electrical has no effect on the direction of Mobile World i.e., Mobile World and Global Electrical go up and down completely randomly.
Pair Corralation between Mobile World and Global Electrical
Assuming the 90 days trading horizon Mobile World is expected to generate 2.56 times less return on investment than Global Electrical. But when comparing it to its historical volatility, Mobile World Investment is 2.39 times less risky than Global Electrical. It trades about 0.05 of its potential returns per unit of risk. Global Electrical Technology is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,754,774 in Global Electrical Technology on September 2, 2024 and sell it today you would earn a total of 895,226 from holding Global Electrical Technology or generate 51.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 65.86% |
| Values | Daily Returns |
Mobile World Investment vs. Global Electrical Technology
Performance |
| Timeline |
| Mobile World Investment |
| Global Electrical |
Mobile World and Global Electrical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mobile World and Global Electrical
The main advantage of trading using opposite Mobile World and Global Electrical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobile World position performs unexpectedly, Global Electrical 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 Global Electrical will offset losses from the drop in Global Electrical's long position.| Mobile World vs. Da Nang Construction | Mobile World vs. Agriculture Printing and | Mobile World vs. Petrolimex Information Technology | Mobile World vs. Binhthuan Agriculture Services |
| Global Electrical vs. DOMESCO Medical Import | Global Electrical vs. Binh Duong Trade | Global Electrical vs. Petrovietnam Technical Services | Global Electrical vs. VTC Telecommunications JSC |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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