Correlation Between China Life and Sinosteel Engineering
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By analyzing existing cross correlation between China Life Insurance and Sinosteel Engineering and, you can compare the effects of market volatilities on China Life and Sinosteel Engineering 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 Sinosteel Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Sinosteel Engineering.
Diversification Opportunities for China Life and Sinosteel Engineering
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Sinosteel is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Sinosteel Engineering and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinosteel Engineering and 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 Sinosteel Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinosteel Engineering and has no effect on the direction of China Life i.e., China Life and Sinosteel Engineering go up and down completely randomly.
Pair Corralation between China Life and Sinosteel Engineering
Assuming the 90 days trading horizon China Life Insurance is expected to generate 0.93 times more return on investment than Sinosteel Engineering. However, China Life Insurance is 1.07 times less risky than Sinosteel Engineering. It trades about 0.05 of its potential returns per unit of risk. Sinosteel Engineering and is currently generating about 0.04 per unit of risk. If you would invest 3,349 in China Life Insurance on September 1, 2024 and sell it today you would earn a total of 861.00 from holding China Life Insurance or generate 25.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Life Insurance vs. Sinosteel Engineering and
Performance |
| Timeline |
| China Life Insurance |
| Sinosteel Engineering and |
China Life and Sinosteel Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Sinosteel Engineering
The main advantage of trading using opposite China Life and Sinosteel Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Sinosteel Engineering 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 Sinosteel Engineering will offset losses from the drop in Sinosteel Engineering's long position.| China Life vs. Industrial and Commercial | China Life vs. China Construction Bank | China Life vs. Bank of China | China Life vs. Agricultural Bank of |
| Sinosteel Engineering vs. Industrial Securities Co | Sinosteel Engineering vs. Western Metal Materials | Sinosteel Engineering vs. Shandong Huifa Foodstuff | Sinosteel Engineering vs. Sichuan Yahua Industrial |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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