Correlation Between China Union and China Telecom
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By analyzing existing cross correlation between China Union Holdings and China Telecom Corp, you can compare the effects of market volatilities on China Union and China Telecom 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 China Union with a short position of China Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Union and China Telecom.
Diversification Opportunities for China Union and China Telecom
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and China is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding China Union Holdings and China Telecom Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Telecom Corp and China Union 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 China Union Holdings are associated (or correlated) with China Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Telecom Corp has no effect on the direction of China Union i.e., China Union and China Telecom go up and down completely randomly.
Pair Corralation between China Union and China Telecom
Assuming the 90 days trading horizon China Union Holdings is expected to generate 2.04 times more return on investment than China Telecom. However, China Union is 2.04 times more volatile than China Telecom Corp. It trades about 0.15 of its potential returns per unit of risk. China Telecom Corp is currently generating about 0.11 per unit of risk. If you would invest 324.00 in China Union Holdings on September 24, 2024 and sell it today you would earn a total of 118.00 from holding China Union Holdings or generate 36.42% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
China Union Holdings vs. China Telecom Corp
Performance |
Timeline |
China Union Holdings |
China Telecom Corp |
China Union and China Telecom Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Union and China Telecom
The main advantage of trading using opposite China Union and China Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Union position performs unexpectedly, China Telecom 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 Telecom will offset losses from the drop in China Telecom's long position.China Union vs. PetroChina Co Ltd | China Union vs. China Mobile Limited | China Union vs. CNOOC Limited | China Union vs. Ping An Insurance |
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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