Correlation Between Beijing Sanyuan and China Life
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By analyzing existing cross correlation between Beijing Sanyuan Foods and China Life Insurance, you can compare the effects of market volatilities on Beijing Sanyuan 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 Beijing Sanyuan with a short position of China Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Sanyuan and China Life.
Diversification Opportunities for Beijing Sanyuan and China Life
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Beijing and China is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Sanyuan Foods 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 Beijing Sanyuan 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 Beijing Sanyuan Foods 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 Beijing Sanyuan i.e., Beijing Sanyuan and China Life go up and down completely randomly.
Pair Corralation between Beijing Sanyuan and China Life
Assuming the 90 days trading horizon Beijing Sanyuan is expected to generate 105.4 times less return on investment than China Life. But when comparing it to its historical volatility, Beijing Sanyuan Foods is 1.27 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 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,771 in China Life Insurance on August 31, 2024 and sell it today you would earn a total of 439.00 from holding China Life Insurance or generate 11.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Sanyuan Foods vs. China Life Insurance
Performance |
| Timeline |
| Beijing Sanyuan Foods |
| China Life Insurance |
Beijing Sanyuan and China Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Sanyuan and China Life
The main advantage of trading using opposite Beijing Sanyuan and China Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Sanyuan 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.| Beijing Sanyuan vs. Lutian Machinery Co | Beijing Sanyuan vs. PetroChina Co Ltd | Beijing Sanyuan vs. Bank of China | Beijing Sanyuan vs. Gansu Jiu Steel |
| China Life vs. XinJiang GuoTong Pipeline | China Life vs. Shandong Hongchuang Aluminum | China Life vs. Zhejiang Yongjin Metal | China Life vs. China National Software |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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