Correlation Between BANK OF CHINA and T MOBILE
Can any of the company-specific risk be diversified away by investing in both BANK OF CHINA and T 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 BANK OF CHINA and T MOBILE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK OF CHINA and T MOBILE INCDL 00001, you can compare the effects of market volatilities on BANK OF CHINA and T 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 BANK OF CHINA with a short position of T MOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK OF CHINA and T MOBILE.
Diversification Opportunities for BANK OF CHINA and T MOBILE
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between BANK and TM5 is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding BANK OF CHINA and T MOBILE INCDL 00001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T MOBILE INCDL and BANK OF CHINA 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 BANK OF CHINA are associated (or correlated) with T MOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T MOBILE INCDL has no effect on the direction of BANK OF CHINA i.e., BANK OF CHINA and T MOBILE go up and down completely randomly.
Pair Corralation between BANK OF CHINA and T MOBILE
Assuming the 90 days trading horizon BANK OF CHINA is expected to generate 3.99 times more return on investment than T MOBILE. However, BANK OF CHINA is 3.99 times more volatile than T MOBILE INCDL 00001. It trades about 0.25 of its potential returns per unit of risk. T MOBILE INCDL 00001 is currently generating about -0.13 per unit of risk. If you would invest 34.00 in BANK OF CHINA on October 17, 2024 and sell it today you would earn a total of 13.00 from holding BANK OF CHINA or generate 38.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK OF CHINA vs. T MOBILE INCDL 00001
Performance |
| Timeline |
| BANK OF CHINA |
| T MOBILE INCDL |
BANK OF CHINA and T MOBILE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK OF CHINA and T MOBILE
The main advantage of trading using opposite BANK OF CHINA and T MOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK OF CHINA position performs unexpectedly, T 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 T MOBILE will offset losses from the drop in T MOBILE's long position.| BANK OF CHINA vs. Texas Roadhouse | BANK OF CHINA vs. EVS Broadcast Equipment | BANK OF CHINA vs. Agilent Technologies | BANK OF CHINA vs. Air Transport Services |
| T MOBILE vs. Direct Line Insurance | T MOBILE vs. PNC Financial Services | T MOBILE vs. BANK OF CHINA | T MOBILE vs. UNIQA INSURANCE GR |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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