Correlation Between Changchun Engley and China Life
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By analyzing existing cross correlation between Changchun Engley Automobile and China Life Insurance, you can compare the effects of market volatilities on Changchun Engley 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 Changchun Engley with a short position of China Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun Engley and China Life.
Diversification Opportunities for Changchun Engley and China Life
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Changchun and China is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Changchun Engley Automobile 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 Changchun Engley 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 Changchun Engley Automobile 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 Changchun Engley i.e., Changchun Engley and China Life go up and down completely randomly.
Pair Corralation between Changchun Engley and China Life
Assuming the 90 days trading horizon Changchun Engley Automobile is expected to under-perform the China Life. In addition to that, Changchun Engley is 1.05 times more volatile than China Life Insurance. It trades about -0.21 of its total potential returns per unit of risk. China Life Insurance is currently generating about -0.07 per unit of volatility. If you would invest 4,192 in China Life Insurance on November 1, 2024 and sell it today you would lose (132.00) from holding China Life Insurance or give up 3.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun Engley Automobile vs. China Life Insurance
Performance |
| Timeline |
| Changchun Engley Aut |
| China Life Insurance |
Changchun Engley and China Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun Engley and China Life
The main advantage of trading using opposite Changchun Engley and China Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun Engley 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.| Changchun Engley vs. SSAW Hotels Resorts | Changchun Engley vs. Winner Medical Co | Changchun Engley vs. Tinavi Medical Technologies | Changchun Engley vs. Shanghai Yanpu Metal |
| China Life vs. Changchun Engley Automobile | China Life vs. Iat Automobile Technology | China Life vs. China Satellite Communications | China Life vs. Guangxi Wuzhou Communications |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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