Correlation Between Zhejiang Construction and China Life
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By analyzing existing cross correlation between Zhejiang Construction Investment and China Life Insurance, you can compare the effects of market volatilities on Zhejiang Construction 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 Zhejiang Construction with a short position of China Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Construction and China Life.
Diversification Opportunities for Zhejiang Construction and China Life
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhejiang and China is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Construction Investme 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 Zhejiang Construction 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 Zhejiang Construction Investment 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 Zhejiang Construction i.e., Zhejiang Construction and China Life go up and down completely randomly.
Pair Corralation between Zhejiang Construction and China Life
Assuming the 90 days trading horizon Zhejiang Construction Investment is expected to generate 1.53 times more return on investment than China Life. However, Zhejiang Construction is 1.53 times more volatile than China Life Insurance. It trades about 0.13 of its potential returns per unit of risk. China Life Insurance is currently generating about -0.02 per unit of risk. If you would invest 905.00 in Zhejiang Construction Investment on August 29, 2024 and sell it today you would earn a total of 111.00 from holding Zhejiang Construction Investment or generate 12.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Zhejiang Construction Investme vs. China Life Insurance
Performance |
| Timeline |
| Zhejiang Construction |
| China Life Insurance |
Zhejiang Construction and China Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhejiang Construction and China Life
The main advantage of trading using opposite Zhejiang Construction and China Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Construction 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.| Zhejiang Construction vs. Agricultural Bank of | Zhejiang Construction vs. Industrial and Commercial | Zhejiang Construction vs. Bank of China | Zhejiang Construction vs. China Construction Bank |
| China Life vs. City Development Environment | China Life vs. Central Plains Environment | China Life vs. By health | China Life vs. Zhongshan Public Utilities |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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