Correlation Between Hygon Information and China Mobile

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Can any of the company-specific risk be diversified away by investing in both Hygon 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 Hygon 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 Hygon Information Technology and China Mobile Limited, you can compare the effects of market volatilities on Hygon 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 Hygon Information with a short position of China Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hygon Information and China Mobile.

Diversification Opportunities for Hygon Information and China Mobile

HygonChinaDiversified AwayHygonChinaDiversified Away100%
0.52
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Hygon and China is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Hygon Information Technology 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 Hygon 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 Hygon Information Technology 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 Hygon Information i.e., Hygon Information and China Mobile go up and down completely randomly.

Pair Corralation between Hygon Information and China Mobile

Assuming the 90 days trading horizon Hygon Information Technology is expected to generate 2.94 times more return on investment than China Mobile. However, Hygon Information is 2.94 times more volatile than China Mobile Limited. It trades about 0.05 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  12,720  in Hygon Information Technology on November 19, 2024 and sell it today you would earn a total of  869.00  from holding Hygon Information Technology or generate 6.83% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy98.31%
ValuesDaily Returns

Hygon Information Technology  vs.  China Mobile Limited

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-505101520
JavaScript chart by amCharts 3.21.15688041 600941
       Timeline  
Hygon Information 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Hygon Information Technology are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hygon Information may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb120125130135140145150155160
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

Hygon Information and China Mobile Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-11.39-8.53-5.67-2.810.04832.855.748.6411.54 0.050.100.150.200.25
JavaScript chart by amCharts 3.21.15688041 600941
       Returns  

Pair Trading with Hygon Information and China Mobile

The main advantage of trading using opposite Hygon Information and China Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hygon 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 Hygon Information Technology 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.
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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