Correlation Between China Mobile and Luzhou Lao
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By analyzing existing cross correlation between China Mobile Limited and Luzhou Lao Jiao, you can compare the effects of market volatilities on China Mobile and Luzhou Lao 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 Luzhou Lao. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mobile and Luzhou Lao.
Diversification Opportunities for China Mobile and Luzhou Lao
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and Luzhou is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding China Mobile Limited and Luzhou Lao Jiao in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luzhou Lao Jiao 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 Luzhou Lao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luzhou Lao Jiao has no effect on the direction of China Mobile i.e., China Mobile and Luzhou Lao go up and down completely randomly.
Pair Corralation between China Mobile and Luzhou Lao
Assuming the 90 days trading horizon China Mobile Limited is expected to generate 0.65 times more return on investment than Luzhou Lao. However, China Mobile Limited is 1.53 times less risky than Luzhou Lao. It trades about 0.3 of its potential returns per unit of risk. Luzhou Lao Jiao is currently generating about -0.11 per unit of risk. If you would invest 10,340 in China Mobile Limited on September 23, 2024 and sell it today you would earn a total of 800.00 from holding China Mobile Limited or generate 7.74% 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. Luzhou Lao Jiao
Performance |
Timeline |
China Mobile Limited |
Luzhou Lao Jiao |
China Mobile and Luzhou Lao Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Mobile and Luzhou Lao
The main advantage of trading using opposite China Mobile and Luzhou Lao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mobile position performs unexpectedly, Luzhou Lao 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 Luzhou Lao will offset losses from the drop in Luzhou Lao'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 |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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