Correlation Between China Mobile and China Fortune
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By analyzing existing cross correlation between China Mobile Limited and China Fortune Land, you can compare the effects of market volatilities on China Mobile and China Fortune 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 Mobile with a short position of China Fortune. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mobile and China Fortune.
Diversification Opportunities for China Mobile and China Fortune
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and China is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding China Mobile Limited and China Fortune Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Fortune Land and China 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 China Mobile Limited are associated (or correlated) with China Fortune. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Fortune Land has no effect on the direction of China Mobile i.e., China Mobile and China Fortune go up and down completely randomly.
Pair Corralation between China Mobile and China Fortune
Assuming the 90 days trading horizon China Mobile is expected to generate 2.21 times less return on investment than China Fortune. But when comparing it to its historical volatility, China Mobile Limited is 4.72 times less risky than China Fortune. It trades about 0.29 of its potential returns per unit of risk. China Fortune Land is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 273.00 in China Fortune Land on September 24, 2024 and sell it today you would earn a total of 38.00 from holding China Fortune Land or generate 13.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
China Mobile Limited vs. China Fortune Land
Performance |
Timeline |
China Mobile Limited |
China Fortune Land |
China Mobile and China Fortune Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Mobile and China Fortune
The main advantage of trading using opposite China Mobile and China Fortune positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mobile position performs unexpectedly, China Fortune 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 Fortune will offset losses from the drop in China Fortune's long position.China Mobile vs. Chengdu Kanghua Biological | China Mobile vs. Beijing Wantai Biological | China Mobile vs. Suzhou Novoprotein Scientific | China Mobile vs. COL Digital Publishing |
China Fortune vs. PetroChina Co Ltd | China Fortune vs. China Mobile Limited | China Fortune vs. CNOOC Limited | China Fortune vs. Ping An Insurance |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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