Correlation Between China Mobile and US Commodity

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

Diversification Opportunities for China Mobile and US Commodity

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between China and USOU is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Mobile Limited and US Commodity Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Commodity Funds 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 US Commodity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Commodity Funds has no effect on the direction of China Mobile i.e., China Mobile and US Commodity go up and down completely randomly.

Pair Corralation between China Mobile and US Commodity

If you would invest (100.00) in US Commodity Funds on December 29, 2023 and sell it today you would earn a total of  100.00  from holding US Commodity Funds or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

China Mobile Limited  vs.  US Commodity Funds

 Performance 
       Timeline  
China Mobile Limited 

Risk-Adjusted Performance

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Low
 
High
Very Weak
Over the last 90 days China Mobile Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical indicators, China Mobile is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
US Commodity Funds 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days US Commodity Funds has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, US Commodity is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

China Mobile and US Commodity Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with China Mobile and US Commodity

The main advantage of trading using opposite China Mobile and US Commodity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mobile position performs unexpectedly, US Commodity 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 US Commodity will offset losses from the drop in US Commodity's long position.
The idea behind China Mobile Limited and US Commodity Funds 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 Commodity Directory module to find actively traded commodities issued by global exchanges.

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