Correlation Between Mingchen Health and China Life
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By analyzing existing cross correlation between Mingchen Health Co and China Life Insurance, you can compare the effects of market volatilities on Mingchen Health 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 Mingchen Health with a short position of China Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mingchen Health and China Life.
Diversification Opportunities for Mingchen Health and China Life
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mingchen and China is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Mingchen Health Co 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 Mingchen Health 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 Mingchen Health Co 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 Mingchen Health i.e., Mingchen Health and China Life go up and down completely randomly.
Pair Corralation between Mingchen Health and China Life
Assuming the 90 days trading horizon Mingchen Health is expected to generate 1.34 times less return on investment than China Life. In addition to that, Mingchen Health is 1.48 times more volatile than China Life Insurance. It trades about 0.05 of its total potential returns per unit of risk. China Life Insurance is currently generating about 0.1 per unit of volatility. If you would invest 3,170 in China Life Insurance on September 3, 2024 and sell it today you would earn a total of 1,040 from holding China Life Insurance or generate 32.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mingchen Health Co vs. China Life Insurance
Performance |
| Timeline |
| Mingchen Health |
| China Life Insurance |
Mingchen Health and China Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mingchen Health and China Life
The main advantage of trading using opposite Mingchen Health and China Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mingchen Health 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.| Mingchen Health vs. Beijing Wantai Biological | Mingchen Health vs. Aluminum Corp of | Mingchen Health vs. COL Digital Publishing | Mingchen Health vs. Shaanxi Meineng Clean |
| China Life vs. Chongqing Road Bridge | China Life vs. Wuhan Xianglong Power | China Life vs. Empyrean Technology Co | China Life vs. Yuanjie Semiconductor Technology |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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