Correlation Between China Life and Fujian Newland
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By analyzing existing cross correlation between China Life Insurance and Fujian Newland Computer, you can compare the effects of market volatilities on China Life and Fujian Newland 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 Fujian Newland. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Fujian Newland.
Diversification Opportunities for China Life and Fujian Newland
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between China and Fujian is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Fujian Newland Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Newland Computer 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 Fujian Newland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Newland Computer has no effect on the direction of China Life i.e., China Life and Fujian Newland go up and down completely randomly.
Pair Corralation between China Life and Fujian Newland
Assuming the 90 days trading horizon China Life Insurance is expected to generate 0.78 times more return on investment than Fujian Newland. However, China Life Insurance is 1.29 times less risky than Fujian Newland. It trades about -0.34 of its potential returns per unit of risk. Fujian Newland Computer is currently generating about -0.31 per unit of risk. If you would invest 4,423 in China Life Insurance on October 11, 2024 and sell it today you would lose (573.00) from holding China Life Insurance or give up 12.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Life Insurance vs. Fujian Newland Computer
Performance |
| Timeline |
| China Life Insurance |
| Fujian Newland Computer |
China Life and Fujian Newland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Fujian Newland
The main advantage of trading using opposite China Life and Fujian Newland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Fujian Newland 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 Fujian Newland will offset losses from the drop in Fujian Newland's long position.| China Life vs. Sanbo Hospital Management | China Life vs. China Reform Health | China Life vs. Sinomach General Machinery | China Life vs. Jinlong Machinery Electronic |
| Fujian Newland vs. China Life Insurance | Fujian Newland vs. Cinda Securities Co | Fujian Newland vs. Piotech Inc A | Fujian Newland 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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