Correlation Between China Life and Hengli Industrial
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By analyzing existing cross correlation between China Life Insurance and Hengli Industrial Development, you can compare the effects of market volatilities on China Life and Hengli Industrial 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 Hengli Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Hengli Industrial.
Diversification Opportunities for China Life and Hengli Industrial
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between China and Hengli is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Hengli Industrial Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengli Industrial 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 Hengli Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengli Industrial has no effect on the direction of China Life i.e., China Life and Hengli Industrial go up and down completely randomly.
Pair Corralation between China Life and Hengli Industrial
Assuming the 90 days trading horizon China Life Insurance is expected to generate 0.64 times more return on investment than Hengli Industrial. However, China Life Insurance is 1.57 times less risky than Hengli Industrial. It trades about 0.03 of its potential returns per unit of risk. Hengli Industrial Development is currently generating about -0.03 per unit of risk. If you would invest 3,673 in China Life Insurance on September 28, 2024 and sell it today you would earn a total of 597.00 from holding China Life Insurance or generate 16.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Life Insurance vs. Hengli Industrial Development
Performance |
| Timeline |
| China Life Insurance |
| Hengli Industrial |
China Life and Hengli Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Hengli Industrial
The main advantage of trading using opposite China Life and Hengli Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Hengli Industrial 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 Hengli Industrial will offset losses from the drop in Hengli Industrial's long position.| China Life vs. Kweichow Moutai Co | China Life vs. Shenzhen Mindray Bio Medical | China Life vs. Jiangsu Pacific Quartz | China Life vs. G bits Network Technology |
| Hengli Industrial vs. China Life Insurance | Hengli Industrial vs. Cinda Securities Co | Hengli Industrial vs. Piotech Inc A | Hengli Industrial vs. Dongxing Sec 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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