Correlation Between Shandong and China Life
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By analyzing existing cross correlation between Shandong Hi Speed RoadBridge and China Life Insurance, you can compare the effects of market volatilities on Shandong and China Life 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 Shandong with a short position of China Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong and China Life.
Diversification Opportunities for Shandong and China Life
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shandong and China is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Hi Speed RoadBridge and China Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Life Insurance and Shandong 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 Shandong Hi Speed RoadBridge are associated (or correlated) with China Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Life Insurance has no effect on the direction of Shandong i.e., Shandong and China Life go up and down completely randomly.
Pair Corralation between Shandong and China Life
Assuming the 90 days trading horizon Shandong is expected to generate 30.63 times less return on investment than China Life. But when comparing it to its historical volatility, Shandong Hi Speed RoadBridge is 1.18 times less risky than China Life. It trades about 0.0 of its potential returns per unit of risk. China Life Insurance is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,738 in China Life Insurance on September 26, 2024 and sell it today you would earn a total of 510.00 from holding China Life Insurance or generate 13.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Hi Speed RoadBridge vs. China Life Insurance
Performance |
| Timeline |
| Shandong Hi Speed |
| China Life Insurance |
Shandong and China Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong and China Life
The main advantage of trading using opposite Shandong and China Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong position performs unexpectedly, China Life 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 Life will offset losses from the drop in China Life's long position.| Shandong vs. Ming Yang Smart | Shandong vs. 159681 | Shandong vs. 159005 | Shandong vs. Loctek Ergonomic Technology |
| China Life vs. RoadMain T Co | China Life vs. Kontour Medical Technology | China Life vs. Beijing Wandong Medical | China Life vs. Shandong Hi Speed RoadBridge |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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