Correlation Between Fujian Nanwang and China Life
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By analyzing existing cross correlation between Fujian Nanwang Environment and China Life Insurance, you can compare the effects of market volatilities on Fujian Nanwang 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 Fujian Nanwang with a short position of China Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Nanwang and China Life.
Diversification Opportunities for Fujian Nanwang and China Life
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Fujian and China is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Nanwang 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 Fujian Nanwang 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 Fujian Nanwang 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 Fujian Nanwang i.e., Fujian Nanwang and China Life go up and down completely randomly.
Pair Corralation between Fujian Nanwang and China Life
Assuming the 90 days trading horizon Fujian Nanwang Environment is expected to under-perform the China Life. But the stock apears to be less risky and, when comparing its historical volatility, Fujian Nanwang Environment is 1.97 times less risky than China Life. The stock trades about -0.31 of its potential returns per unit of risk. The China Life Insurance is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 3,841 in China Life Insurance on January 1, 2025 and sell it today you would lose (81.00) from holding China Life Insurance or give up 2.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Nanwang Environment vs. China Life Insurance
Performance |
| Timeline |
| Fujian Nanwang Envir |
| China Life Insurance |
Fujian Nanwang and China Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Nanwang and China Life
The main advantage of trading using opposite Fujian Nanwang and China Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Nanwang 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.| Fujian Nanwang vs. Nsfocus Information Technology | Fujian Nanwang vs. YLZ Information Tech | Fujian Nanwang vs. Zhejiang JIULI Hi tech | Fujian Nanwang vs. Tianjin Hi Tech Development |
| China Life vs. Chengtun Mining Group | China Life vs. Digital China Information | China Life vs. Guangzhou Ruoyuchen Information | China Life vs. AVCON Information Tech |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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