Correlation Between China Life and Zhejiang Qianjiang
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By analyzing existing cross correlation between China Life Insurance and Zhejiang Qianjiang Motorcycle, you can compare the effects of market volatilities on China Life and Zhejiang Qianjiang 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 Zhejiang Qianjiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Zhejiang Qianjiang.
Diversification Opportunities for China Life and Zhejiang Qianjiang
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Zhejiang is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Zhejiang Qianjiang Motorcycle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Qianjiang 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 Zhejiang Qianjiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Qianjiang has no effect on the direction of China Life i.e., China Life and Zhejiang Qianjiang go up and down completely randomly.
Pair Corralation between China Life and Zhejiang Qianjiang
Assuming the 90 days trading horizon China Life Insurance is expected to generate 1.48 times more return on investment than Zhejiang Qianjiang. However, China Life is 1.48 times more volatile than Zhejiang Qianjiang Motorcycle. It trades about -0.01 of its potential returns per unit of risk. Zhejiang Qianjiang Motorcycle is currently generating about -0.08 per unit of risk. If you would invest 4,284 in China Life Insurance on September 3, 2024 and sell it today you would lose (74.00) from holding China Life Insurance or give up 1.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Life Insurance vs. Zhejiang Qianjiang Motorcycle
Performance |
| Timeline |
| China Life Insurance |
| Zhejiang Qianjiang |
China Life and Zhejiang Qianjiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Zhejiang Qianjiang
The main advantage of trading using opposite China Life and Zhejiang Qianjiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Zhejiang Qianjiang 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 Zhejiang Qianjiang will offset losses from the drop in Zhejiang Qianjiang's long position.| China Life vs. Chongqing Road Bridge | China Life vs. Wuhan Xianglong Power | China Life vs. Empyrean Technology Co | China Life vs. Yuanjie Semiconductor Technology |
| Zhejiang Qianjiang vs. PetroChina Co Ltd | Zhejiang Qianjiang vs. China Mobile Limited | Zhejiang Qianjiang vs. Industrial and Commercial | Zhejiang Qianjiang vs. China Life Insurance |
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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