Correlation Between Wuhan Yangtze and China Life
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By analyzing existing cross correlation between Wuhan Yangtze Communication and China Life Insurance, you can compare the effects of market volatilities on Wuhan Yangtze 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 Wuhan Yangtze with a short position of China Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wuhan Yangtze and China Life.
Diversification Opportunities for Wuhan Yangtze and China Life
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Wuhan and China is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Wuhan Yangtze Communication 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 Wuhan Yangtze 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 Wuhan Yangtze Communication 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 Wuhan Yangtze i.e., Wuhan Yangtze and China Life go up and down completely randomly.
Pair Corralation between Wuhan Yangtze and China Life
Assuming the 90 days trading horizon Wuhan Yangtze Communication is expected to generate 1.98 times more return on investment than China Life. However, Wuhan Yangtze is 1.98 times more volatile than China Life Insurance. It trades about 0.17 of its potential returns per unit of risk. China Life Insurance is currently generating about 0.13 per unit of risk. If you would invest 2,096 in Wuhan Yangtze Communication on November 5, 2024 and sell it today you would earn a total of 197.00 from holding Wuhan Yangtze Communication or generate 9.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wuhan Yangtze Communication vs. China Life Insurance
Performance |
| Timeline |
| Wuhan Yangtze Commun |
| China Life Insurance |
Wuhan Yangtze and China Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wuhan Yangtze and China Life
The main advantage of trading using opposite Wuhan Yangtze and China Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wuhan Yangtze 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.| Wuhan Yangtze vs. Eastern Communications Co | Wuhan Yangtze vs. Jiangsu Jinling Sports | Wuhan Yangtze vs. Everdisplay Optronics Shanghai | Wuhan Yangtze vs. Beijing Bewinner Communications |
| China Life vs. Eastern Communications Co | China Life vs. Queclink Wireless Solutions | China Life vs. Tongyu Communication | China Life vs. Shenzhen SDG Information |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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