Correlation Between Emdoor Information and China Mobile

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Can any of the company-specific risk be diversified away by investing in both Emdoor Information 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 Emdoor Information and China Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emdoor Information Co and China Mobile Limited, you can compare the effects of market volatilities on Emdoor Information 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 Emdoor Information with a short position of China Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emdoor Information and China Mobile.

Diversification Opportunities for Emdoor Information and China Mobile

EmdoorChinaDiversified AwayEmdoorChinaDiversified Away100%
0.63
  Correlation Coefficient

Poor diversification

The 3 months correlation between Emdoor and China is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Emdoor Information Co 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 Emdoor Information 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 Emdoor Information Co 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 Emdoor Information i.e., Emdoor Information and China Mobile go up and down completely randomly.

Pair Corralation between Emdoor Information and China Mobile

Assuming the 90 days trading horizon Emdoor Information Co is expected to generate 3.69 times more return on investment than China Mobile. However, Emdoor Information is 3.69 times more volatile than China Mobile Limited. It trades about 0.08 of its potential returns per unit of risk. China Mobile Limited is currently generating about 0.13 per unit of risk. If you would invest  4,326  in Emdoor Information Co on November 19, 2024 and sell it today you would earn a total of  676.00  from holding Emdoor Information Co or generate 15.63% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy98.31%
ValuesDaily Returns

Emdoor Information Co  vs.  China Mobile Limited

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 051015202530
JavaScript chart by amCharts 3.21.15001314 600941
       Timeline  
Emdoor Information 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Emdoor Information Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Emdoor Information sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb4045505560
China Mobile Limited 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in China Mobile Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, China Mobile may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb105110115120

Emdoor Information and China Mobile Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-13.2-9.89-6.57-3.260.05723.386.8110.2513.68 0.050.100.150.200.25
JavaScript chart by amCharts 3.21.15001314 600941
       Returns  

Pair Trading with Emdoor Information and China Mobile

The main advantage of trading using opposite Emdoor Information and China Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emdoor Information 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.
The idea behind Emdoor Information Co and China Mobile Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.

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