Correlation Between China Life and Emdoor Information
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By analyzing existing cross correlation between China Life Insurance and Emdoor Information Co, you can compare the effects of market volatilities on China Life and Emdoor Information 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 Emdoor Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Emdoor Information.
Diversification Opportunities for China Life and Emdoor Information
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Emdoor is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Emdoor Information Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emdoor Information 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 Emdoor Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emdoor Information has no effect on the direction of China Life i.e., China Life and Emdoor Information go up and down completely randomly.
Pair Corralation between China Life and Emdoor Information
Assuming the 90 days trading horizon China Life Insurance is expected to under-perform the Emdoor Information. In addition to that, China Life is 1.02 times more volatile than Emdoor Information Co. It trades about -0.01 of its total potential returns per unit of risk. Emdoor Information Co is currently generating about 0.25 per unit of volatility. If you would invest 4,401 in Emdoor Information Co on September 3, 2024 and sell it today you would earn a total of 751.00 from holding Emdoor Information Co or generate 17.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Life Insurance vs. Emdoor Information Co
Performance |
| Timeline |
| China Life Insurance |
| Emdoor Information |
China Life and Emdoor Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Emdoor Information
The main advantage of trading using opposite China Life and Emdoor Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Emdoor Information 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 Emdoor Information will offset losses from the drop in Emdoor Information'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 |
| Emdoor Information vs. PetroChina Co Ltd | Emdoor Information vs. China Mobile Limited | Emdoor Information vs. Industrial and Commercial | Emdoor Information 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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