Correlation Between Long Yuan and China Life
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By analyzing existing cross correlation between Long Yuan Construction and China Life Insurance, you can compare the effects of market volatilities on Long Yuan 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 Long Yuan with a short position of China Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Long Yuan and China Life.
Diversification Opportunities for Long Yuan and China Life
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Long and China is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Long Yuan Construction 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 Long Yuan 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 Long Yuan Construction 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 Long Yuan i.e., Long Yuan and China Life go up and down completely randomly.
Pair Corralation between Long Yuan and China Life
Assuming the 90 days trading horizon Long Yuan Construction is expected to under-perform the China Life. In addition to that, Long Yuan is 1.26 times more volatile than China Life Insurance. It trades about -0.01 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 3,533 in China Life Insurance on September 12, 2024 and sell it today you would earn a total of 890.00 from holding China Life Insurance or generate 25.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Long Yuan Construction vs. China Life Insurance
Performance |
| Timeline |
| Long Yuan Construction |
| China Life Insurance |
Long Yuan and China Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Long Yuan and China Life
The main advantage of trading using opposite Long Yuan and China Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Long Yuan 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.| Long Yuan vs. Saurer Intelligent Technology | Long Yuan vs. Tianshui Huatian Technology | Long Yuan vs. HUAQIN TECHNOLOGY LTD | Long Yuan vs. Northking Information Technology |
| China Life vs. China Petroleum Chemical | China Life vs. PetroChina Co Ltd | China Life vs. China Mobile Limited | China Life vs. Industrial and Commercial |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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