Correlation Between Zhongjing Food and China Life
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By analyzing existing cross correlation between Zhongjing Food Co and China Life Insurance, you can compare the effects of market volatilities on Zhongjing Food 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 Zhongjing Food with a short position of China Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongjing Food and China Life.
Diversification Opportunities for Zhongjing Food and China Life
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhongjing and China is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Zhongjing Food 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 Zhongjing Food 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 Zhongjing Food 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 Zhongjing Food i.e., Zhongjing Food and China Life go up and down completely randomly.
Pair Corralation between Zhongjing Food and China Life
Assuming the 90 days trading horizon Zhongjing Food Co is expected to under-perform the China Life. In addition to that, Zhongjing Food is 1.05 times more volatile than China Life Insurance. It trades about -0.09 of its total potential returns per unit of risk. China Life Insurance is currently generating about 0.07 per unit of volatility. If you would invest 3,982 in China Life Insurance on November 3, 2024 and sell it today you would earn a total of 78.00 from holding China Life Insurance or generate 1.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhongjing Food Co vs. China Life Insurance
Performance |
| Timeline |
| Zhongjing Food |
| China Life Insurance |
Zhongjing Food and China Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongjing Food and China Life
The main advantage of trading using opposite Zhongjing Food and China Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongjing Food 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.| Zhongjing Food vs. Duzhe Publishing Media | Zhongjing Food vs. Shanghai Action Education | Zhongjing Food vs. COL Digital Publishing | Zhongjing Food vs. Jiangsu Phoenix Publishing |
| China Life vs. Shenzhen Noposion Agrochemicals | China Life vs. Shenyang Chemical Industry | China Life vs. Daoming OpticsChemical Co | China Life vs. Semiconductor Manufacturing Intl |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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