Correlation Between China Mobile and China Enterprise
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By analyzing existing cross correlation between China Mobile Limited and China Enterprise Co, you can compare the effects of market volatilities on China Mobile and China Enterprise 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 Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mobile and China Enterprise.
Diversification Opportunities for China Mobile and China Enterprise
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and China is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding China Mobile Limited and China Enterprise Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Enterprise 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 Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Enterprise has no effect on the direction of China Mobile i.e., China Mobile and China Enterprise go up and down completely randomly.
Pair Corralation between China Mobile and China Enterprise
Assuming the 90 days trading horizon China Mobile Limited is expected to generate 0.41 times more return on investment than China Enterprise. However, China Mobile Limited is 2.44 times less risky than China Enterprise. It trades about 0.36 of its potential returns per unit of risk. China Enterprise Co is currently generating about -0.02 per unit of risk. If you would invest 10,370 in China Mobile Limited on September 25, 2024 and sell it today you would earn a total of 1,015 from holding China Mobile Limited or generate 9.79% 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 Enterprise Co
Performance |
Timeline |
China Mobile Limited |
China Enterprise |
China Mobile and China Enterprise Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Mobile and China Enterprise
The main advantage of trading using opposite China Mobile and China Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mobile position performs unexpectedly, China Enterprise 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 Enterprise will offset losses from the drop in China Enterprise'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 Enterprise vs. PetroChina Co Ltd | China Enterprise vs. China Mobile Limited | China Enterprise vs. CNOOC Limited | China Enterprise 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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