Correlation Between China Mobile and China Unicom

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

Diversification Opportunities for China Mobile and China Unicom

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between China Mobile and China Unicom

If you would invest (100.00) in China Unicom Limited on December 30, 2023 and sell it today you would earn a total of  100.00  from holding China Unicom Limited or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

China Mobile Limited  vs.  China Unicom Limited

 Performance 
       Timeline  
China Mobile Limited 

Risk-Adjusted Performance

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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 recent stock price mess, may contribute to short-term losses for the institutional investors.
China Unicom Limited 

Risk-Adjusted Performance

0 of 100

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

China Mobile and China Unicom Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with China Mobile and China Unicom

The main advantage of trading using opposite China Mobile and China Unicom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mobile position performs unexpectedly, China Unicom 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 Unicom will offset losses from the drop in China Unicom's long position.
The idea behind China Mobile Limited and China Unicom 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.

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