Correlation Between China Life and Hengkang Medical
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By analyzing existing cross correlation between China Life Insurance and Hengkang Medical Group, you can compare the effects of market volatilities on China Life and Hengkang 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 Hengkang Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Hengkang Medical.
Diversification Opportunities for China Life and Hengkang Medical
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between China and Hengkang is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Hengkang Medical Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengkang 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 Hengkang Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengkang Medical has no effect on the direction of China Life i.e., China Life and Hengkang Medical go up and down completely randomly.
Pair Corralation between China Life and Hengkang Medical
Assuming the 90 days trading horizon China Life Insurance is expected to generate 0.71 times more return on investment than Hengkang Medical. However, China Life Insurance is 1.4 times less risky than Hengkang Medical. It trades about 0.02 of its potential returns per unit of risk. Hengkang Medical Group is currently generating about -0.03 per unit of risk. If you would invest 3,430 in China Life Insurance on October 16, 2024 and sell it today you would earn a total of 313.00 from holding China Life Insurance or generate 9.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Life Insurance vs. Hengkang Medical Group
Performance |
| Timeline |
| China Life Insurance |
| Hengkang Medical |
China Life and Hengkang Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Hengkang Medical
The main advantage of trading using opposite China Life and Hengkang Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Hengkang 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 Hengkang Medical will offset losses from the drop in Hengkang Medical's long position.| China Life vs. Tianshan Aluminum Group | China Life vs. Guangzhou Zhujiang Brewery | China Life vs. Eastroc Beverage Group | China Life vs. Telling Telecommunication Holding |
| Hengkang Medical vs. HeBei Jinniu Chemical | Hengkang Medical vs. Dymatic Chemicals | Hengkang Medical vs. Wuxi Chemical Equipment | Hengkang Medical 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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