Correlation Between China Reform and China Life
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By analyzing existing cross correlation between China Reform Health and China Life Insurance, you can compare the effects of market volatilities on China Reform 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 China Reform with a short position of China Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Reform and China Life.
Diversification Opportunities for China Reform and China Life
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and China is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding China Reform Health 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 China Reform 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 Reform Health 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 China Reform i.e., China Reform and China Life go up and down completely randomly.
Pair Corralation between China Reform and China Life
Assuming the 90 days trading horizon China Reform Health is expected to under-perform the China Life. In addition to that, China Reform is 1.24 times more volatile than China Life Insurance. It trades about -0.47 of its total potential returns per unit of risk. China Life Insurance is currently generating about -0.34 per unit of volatility. If you would invest 4,423 in China Life Insurance on October 11, 2024 and sell it today you would lose (573.00) from holding China Life Insurance or give up 12.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Reform Health vs. China Life Insurance
Performance |
| Timeline |
| China Reform Health |
| China Life Insurance |
China Reform and China Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Reform and China Life
The main advantage of trading using opposite China Reform and China Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Reform 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.| China Reform vs. Iat Automobile Technology | China Reform vs. Cultural Investment Holdings | China Reform vs. Air China Ltd | China Reform vs. Shanghai Material Trading |
| China Life vs. Sanbo Hospital Management | China Life vs. China Reform Health | China Life vs. Sinomach General Machinery | China Life vs. Jinlong Machinery Electronic |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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