Correlation Between T-Mobile and China Mobile
Can any of the company-specific risk be diversified away by investing in both T-Mobile 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 T-Mobile and China Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between T Mobile and China Mobile Limited, you can compare the effects of market volatilities on T-Mobile 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 T-Mobile with a short position of China Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of T-Mobile and China Mobile.
Diversification Opportunities for T-Mobile and China Mobile
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between T-Mobile and China is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding T Mobile and China Mobile Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Mobile Limited and T-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 T Mobile 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 Mobile Limited has no effect on the direction of T-Mobile i.e., T-Mobile and China Mobile go up and down completely randomly.
Pair Corralation between T-Mobile and China Mobile
Assuming the 90 days horizon T Mobile is expected to generate 3.52 times more return on investment than China Mobile. However, T-Mobile is 3.52 times more volatile than China Mobile Limited. It trades about 0.06 of its potential returns per unit of risk. China Mobile Limited is currently generating about -0.08 per unit of risk. If you would invest 19,665 in T Mobile on October 12, 2024 and sell it today you would earn a total of 1,025 from holding T Mobile or generate 5.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.67% |
| Values | Daily Returns |
T Mobile vs. China Mobile Limited
Performance |
| Timeline |
| T Mobile |
| China Mobile Limited |
T-Mobile and China Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with T-Mobile and China Mobile
The main advantage of trading using opposite T-Mobile and China Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T-Mobile 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.| T-Mobile vs. AEGEAN AIRLINES | T-Mobile vs. CHINA TONTINE WINES | T-Mobile vs. Singapore Airlines Limited | T-Mobile vs. China Eastern Airlines |
| China Mobile vs. Nippon Telegraph and | China Mobile vs. Superior Plus Corp | China Mobile vs. NMI Holdings | China Mobile vs. SIVERS SEMICONDUCTORS AB |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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