Correlation Between Great Computer and China Mobile

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Great Computer 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 Great Computer and China Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Computer and China Mobile, you can compare the effects of market volatilities on Great Computer 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 Great Computer with a short position of China Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Computer and China Mobile.

Diversification Opportunities for Great Computer and China Mobile

-0.72
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Great and China is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Great Computer and China Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Mobile and Great Computer 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 Great Computer 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 has no effect on the direction of Great Computer i.e., Great Computer and China Mobile go up and down completely randomly.

Pair Corralation between Great Computer and China Mobile

Assuming the 90 days trading horizon Great Computer is expected to generate 7.33 times more return on investment than China Mobile. However, Great Computer is 7.33 times more volatile than China Mobile. It trades about 0.18 of its potential returns per unit of risk. China Mobile is currently generating about -0.2 per unit of risk. If you would invest  1,860  in Great Computer on October 9, 2024 and sell it today you would earn a total of  365.00  from holding Great Computer or generate 19.62% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Great Computer  vs.  China Mobile

 Performance 
       Timeline  
Great Computer 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Great Computer are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Great Computer showed solid returns over the last few months and may actually be approaching a breakup point.
China Mobile 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days China Mobile has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Great Computer and China Mobile Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Great Computer and China Mobile

The main advantage of trading using opposite Great Computer and China Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Computer 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 Great Computer and China Mobile 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

Other Complementary Tools

Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Analyst Advice
Analyst recommendations and target price estimates broken down by several categories
ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world