Correlation Between China Life and Innovative Medical
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By analyzing existing cross correlation between China Life Insurance and Innovative Medical Management, you can compare the effects of market volatilities on China Life and Innovative Medical 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 Innovative Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Innovative Medical.
Diversification Opportunities for China Life and Innovative Medical
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Innovative is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Innovative Medical Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovative Medical 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 Innovative Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovative Medical has no effect on the direction of China Life i.e., China Life and Innovative Medical go up and down completely randomly.
Pair Corralation between China Life and Innovative Medical
Assuming the 90 days trading horizon China Life Insurance is expected to generate 0.63 times more return on investment than Innovative Medical. However, China Life Insurance is 1.58 times less risky than Innovative Medical. It trades about 0.09 of its potential returns per unit of risk. Innovative Medical Management is currently generating about 0.02 per unit of risk. If you would invest 2,849 in China Life Insurance on September 3, 2024 and sell it today you would earn a total of 1,402 from holding China Life Insurance or generate 49.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Life Insurance vs. Innovative Medical Management
Performance |
| Timeline |
| China Life Insurance |
| Innovative Medical |
China Life and Innovative Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Innovative Medical
The main advantage of trading using opposite China Life and Innovative Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Innovative Medical 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 Innovative Medical will offset losses from the drop in Innovative Medical'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 |
| Innovative Medical vs. Chengdu Kanghua Biological | Innovative Medical vs. Beijing Wantai Biological | Innovative Medical vs. Suzhou Novoprotein Scientific | Innovative Medical vs. Aluminum Corp of |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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