Correlation Between Hubei Forbon and China Life
Specify exactly 2 symbols:
By analyzing existing cross correlation between Hubei Forbon Technology and China Life Insurance, you can compare the effects of market volatilities on Hubei Forbon 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 Hubei Forbon with a short position of China Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Forbon and China Life.
Diversification Opportunities for Hubei Forbon and China Life
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hubei and China is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Forbon Technology 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 Hubei Forbon 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 Hubei Forbon Technology 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 Hubei Forbon i.e., Hubei Forbon and China Life go up and down completely randomly.
Pair Corralation between Hubei Forbon and China Life
Assuming the 90 days trading horizon Hubei Forbon Technology is expected to generate 1.33 times more return on investment than China Life. However, Hubei Forbon is 1.33 times more volatile than China Life Insurance. It trades about 0.04 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 674.00 in Hubei Forbon Technology on September 4, 2024 and sell it today you would earn a total of 253.00 from holding Hubei Forbon Technology or generate 37.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubei Forbon Technology vs. China Life Insurance
Performance |
| Timeline |
| Hubei Forbon Technology |
| China Life Insurance |
Hubei Forbon and China Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Forbon and China Life
The main advantage of trading using opposite Hubei Forbon and China Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Forbon 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.| Hubei Forbon vs. Zijin Mining Group | Hubei Forbon vs. Wanhua Chemical Group | Hubei Forbon vs. Baoshan Iron Steel | Hubei Forbon vs. Rongsheng Petrochemical Co |
| China Life vs. Beijing Kaiwen Education | China Life vs. Shanghai Action Education | China Life vs. Chengtun Mining Group | China Life vs. Zhejiang Publishing Media |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |