Correlation Between Sinomach General and China Life
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By analyzing existing cross correlation between Sinomach General Machinery and China Life Insurance, you can compare the effects of market volatilities on Sinomach General 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 Sinomach General with a short position of China Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinomach General and China Life.
Diversification Opportunities for Sinomach General and China Life
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sinomach and China is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Sinomach General Machinery 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 Sinomach General 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 Sinomach General Machinery 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 Sinomach General i.e., Sinomach General and China Life go up and down completely randomly.
Pair Corralation between Sinomach General and China Life
Assuming the 90 days trading horizon Sinomach General is expected to generate 1.05 times less return on investment than China Life. In addition to that, Sinomach General is 1.36 times more volatile than China Life Insurance. It trades about 0.02 of its total potential returns per unit of risk. China Life Insurance is currently generating about 0.03 per unit of volatility. If you would invest 3,301 in China Life Insurance on October 26, 2024 and sell it today you would earn a total of 786.00 from holding China Life Insurance or generate 23.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinomach General Machinery vs. China Life Insurance
Performance |
| Timeline |
| Sinomach General Mac |
| China Life Insurance |
Sinomach General and China Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinomach General and China Life
The main advantage of trading using opposite Sinomach General and China Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinomach General 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.| Sinomach General vs. Winner Medical Co | Sinomach General vs. Medprin Regenerative Medical | Sinomach General vs. De Rucci Healthy | Sinomach General vs. Shanghai Rongtai Health |
| China Life vs. Wuhan Yangtze Communication | China Life vs. Mingchen Health Co | China Life vs. Dezhan HealthCare Co | China Life vs. Tianjin Hi Tech Development |
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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