Correlation Between Central Plains and China Life
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By analyzing existing cross correlation between Central Plains Environment and China Life Insurance, you can compare the effects of market volatilities on Central Plains 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 Central Plains with a short position of China Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Plains and China Life.
Diversification Opportunities for Central Plains and China Life
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Central and China is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Central Plains Environment 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 Central Plains 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 Central Plains Environment 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 Central Plains i.e., Central Plains and China Life go up and down completely randomly.
Pair Corralation between Central Plains and China Life
Assuming the 90 days trading horizon Central Plains Environment is expected to generate 0.96 times more return on investment than China Life. However, Central Plains Environment is 1.05 times less risky than China Life. It trades about 0.05 of its potential returns per unit of risk. China Life Insurance is currently generating about 0.03 per unit of risk. If you would invest 640.00 in Central Plains Environment on September 1, 2024 and sell it today you would earn a total of 248.00 from holding Central Plains Environment or generate 38.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central Plains Environment vs. China Life Insurance
Performance |
| Timeline |
| Central Plains Envir |
| China Life Insurance |
Central Plains and China Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Plains and China Life
The main advantage of trading using opposite Central Plains and China Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Plains 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.| Central Plains vs. Sinomach Automobile Co | Central Plains vs. Guangdong Shenglu Telecommunication | Central Plains vs. CIMC Vehicles Co | Central Plains vs. Zhongtong Guomai Communication |
| China Life vs. Industrial and Commercial | China Life vs. China Construction Bank | China Life vs. Bank of China | China Life vs. Agricultural Bank of |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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