Correlation Between Prudential Financial and China Mobile
Can any of the company-specific risk be diversified away by investing in both Prudential Financial 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 Prudential Financial and China Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Financial and China Life Insurance, you can compare the effects of market volatilities on Prudential Financial 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 Prudential Financial with a short position of China Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Financial and China Mobile.
Diversification Opportunities for Prudential Financial and China Mobile
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Prudential and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Financial 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 Prudential Financial 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 Prudential Financial 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 Prudential Financial i.e., Prudential Financial and China Mobile go up and down completely randomly.
Pair Corralation between Prudential Financial and China Mobile
If you would invest 172.00 in China Life Insurance on September 2, 2024 and sell it today you would earn a total of 3.00 from holding China Life Insurance or generate 1.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Prudential Financial vs. China Life Insurance
Performance |
| Timeline |
| Prudential Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| China Life Insurance |
Prudential Financial and China Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Financial and China Mobile
The main advantage of trading using opposite Prudential Financial and China Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Financial 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.| Prudential Financial vs. United Insurance Holdings | Prudential Financial vs. Singapore Reinsurance | Prudential Financial vs. Zurich Insurance Group | Prudential Financial vs. Carsales |
| China Mobile vs. Natural Health Trends | China Mobile vs. FEMALE HEALTH | China Mobile vs. Boyd Gaming | China Mobile vs. PENN NATL GAMING |
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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