Correlation Between China Mobile and Consolidated Communications
Can any of the company-specific risk be diversified away by investing in both China Mobile and Consolidated Communications 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 Consolidated Communications 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 Consolidated Communications Holdings, you can compare the effects of market volatilities on China Mobile and Consolidated Communications 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 Consolidated Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mobile and Consolidated Communications.
Diversification Opportunities for China Mobile and Consolidated Communications
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Consolidated is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding China Mobile Limited and Consolidated Communications Ho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consolidated Communications 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 Consolidated Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consolidated Communications has no effect on the direction of China Mobile i.e., China Mobile and Consolidated Communications go up and down completely randomly.
Pair Corralation between China Mobile and Consolidated Communications
Assuming the 90 days horizon China Mobile Limited is expected to generate 1.22 times more return on investment than Consolidated Communications. However, China Mobile is 1.22 times more volatile than Consolidated Communications Holdings. It trades about 0.11 of its potential returns per unit of risk. Consolidated Communications Holdings is currently generating about -0.02 per unit of risk. If you would invest 141.00 in China Mobile Limited on March 21, 2024 and sell it today you would earn a total of 716.00 from holding China Mobile Limited or generate 507.8% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
China Mobile Limited vs. Consolidated Communications Ho
Performance |
Timeline |
China Mobile Limited |
Consolidated Communications |
China Mobile and Consolidated Communications Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Mobile and Consolidated Communications
The main advantage of trading using opposite China Mobile and Consolidated Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mobile position performs unexpectedly, Consolidated Communications 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 Consolidated Communications will offset losses from the drop in Consolidated Communications' long position.China Mobile vs. Deutsche Telekom AG | China Mobile vs. NMI Holdings | China Mobile vs. NorAm Drilling AS | China Mobile vs. SIVERS SEMICONDUCTORS AB |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |