Correlation Between China Life and Luzhou Lao
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By analyzing existing cross correlation between China Life Insurance and Luzhou Lao Jiao, you can compare the effects of market volatilities on China Life and Luzhou Lao 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 China Life with a short position of Luzhou Lao. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Luzhou Lao.
Diversification Opportunities for China Life and Luzhou Lao
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Luzhou is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Luzhou Lao Jiao in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luzhou Lao Jiao and China Life 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 China Life Insurance are associated (or correlated) with Luzhou Lao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luzhou Lao Jiao has no effect on the direction of China Life i.e., China Life and Luzhou Lao go up and down completely randomly.
Pair Corralation between China Life and Luzhou Lao
Assuming the 90 days trading horizon China Life Insurance is expected to under-perform the Luzhou Lao. In addition to that, China Life is 1.07 times more volatile than Luzhou Lao Jiao. It trades about -0.01 of its total potential returns per unit of risk. Luzhou Lao Jiao is currently generating about 0.03 per unit of volatility. If you would invest 14,012 in Luzhou Lao Jiao on August 24, 2024 and sell it today you would earn a total of 156.00 from holding Luzhou Lao Jiao or generate 1.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Life Insurance vs. Luzhou Lao Jiao
Performance |
| Timeline |
| China Life Insurance |
| Luzhou Lao Jiao |
China Life and Luzhou Lao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Luzhou Lao
The main advantage of trading using opposite China Life and Luzhou Lao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Luzhou Lao 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 Luzhou Lao will offset losses from the drop in Luzhou Lao's long position.| China Life vs. Xiamen Goldenhome Co | China Life vs. Tianjin Hi Tech Development | China Life vs. Zhejiang JIULI Hi tech | China Life vs. Guangdong Shenglu Telecommunication |
| Luzhou Lao vs. Zhejiang Yayi Metal | Luzhou Lao vs. Shandong Mining Machinery | Luzhou Lao vs. Sinosteel Luonai Materials | Luzhou Lao vs. CITIC Metal Co |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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