Correlation Between Jinyu Bio and China Life
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By analyzing existing cross correlation between Jinyu Bio Technology Co and China Life Insurance, you can compare the effects of market volatilities on Jinyu Bio 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 Jinyu Bio with a short position of China Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinyu Bio and China Life.
Diversification Opportunities for Jinyu Bio and China Life
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jinyu and China is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Jinyu Bio Technology 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 Jinyu Bio 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 Jinyu Bio Technology 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 Jinyu Bio i.e., Jinyu Bio and China Life go up and down completely randomly.
Pair Corralation between Jinyu Bio and China Life
Assuming the 90 days trading horizon Jinyu Bio is expected to generate 32.63 times less return on investment than China Life. But when comparing it to its historical volatility, Jinyu Bio Technology Co is 1.12 times less risky than China Life. It trades about 0.0 of its potential returns per unit of risk. China Life Insurance is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,936 in China Life Insurance on November 7, 2024 and sell it today you would earn a total of 1,124 from holding China Life Insurance or generate 38.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jinyu Bio Technology Co vs. China Life Insurance
Performance |
| Timeline |
| Jinyu Bio Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| China Life Insurance |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Jinyu Bio and China Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinyu Bio and China Life
The main advantage of trading using opposite Jinyu Bio and China Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinyu Bio 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.The idea behind Jinyu Bio Technology Co and China Life Insurance pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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