Correlation Between China Life and Xiangyang Automobile
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By analyzing existing cross correlation between China Life Insurance and Xiangyang Automobile Bearing, you can compare the effects of market volatilities on China Life and Xiangyang Automobile 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 Xiangyang Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Xiangyang Automobile.
Diversification Opportunities for China Life and Xiangyang Automobile
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and Xiangyang is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Xiangyang Automobile Bearing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiangyang Automobile 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 Xiangyang Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiangyang Automobile has no effect on the direction of China Life i.e., China Life and Xiangyang Automobile go up and down completely randomly.
Pair Corralation between China Life and Xiangyang Automobile
Assuming the 90 days trading horizon China Life is expected to generate 9.37 times less return on investment than Xiangyang Automobile. But when comparing it to its historical volatility, China Life Insurance is 2.8 times less risky than Xiangyang Automobile. It trades about 0.06 of its potential returns per unit of risk. Xiangyang Automobile Bearing is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 577.00 in Xiangyang Automobile Bearing on September 29, 2024 and sell it today you would earn a total of 131.00 from holding Xiangyang Automobile Bearing or generate 22.7% 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. Xiangyang Automobile Bearing
Performance |
| Timeline |
| China Life Insurance |
| Xiangyang Automobile |
China Life and Xiangyang Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Xiangyang Automobile
The main advantage of trading using opposite China Life and Xiangyang Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Xiangyang Automobile 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 Xiangyang Automobile will offset losses from the drop in Xiangyang Automobile'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 |
| Xiangyang Automobile vs. Chahua Modern Housewares | Xiangyang Automobile vs. ChengDu Hi Tech Development | Xiangyang Automobile vs. Aerospace Hi Tech Holding | Xiangyang Automobile vs. Kuang Chi Technologies |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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