Correlation Between China Life and Success Electronics
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By analyzing existing cross correlation between China Life Insurance and Success Electronics, you can compare the effects of market volatilities on China Life and Success Electronics 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 Success Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Success Electronics.
Diversification Opportunities for China Life and Success Electronics
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Success is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Success Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Success Electronics 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 Success Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Success Electronics has no effect on the direction of China Life i.e., China Life and Success Electronics go up and down completely randomly.
Pair Corralation between China Life and Success Electronics
Assuming the 90 days trading horizon China Life Insurance is expected to under-perform the Success Electronics. In addition to that, China Life is 1.14 times more volatile than Success Electronics. It trades about -0.06 of its total potential returns per unit of risk. Success Electronics is currently generating about 0.01 per unit of volatility. If you would invest 380.00 in Success Electronics on August 28, 2024 and sell it today you would lose (1.00) from holding Success Electronics or give up 0.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Life Insurance vs. Success Electronics
Performance |
| Timeline |
| China Life Insurance |
| Success Electronics |
China Life and Success Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Success Electronics
The main advantage of trading using opposite China Life and Success Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Success Electronics 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 Success Electronics will offset losses from the drop in Success Electronics' long position.| China Life vs. Ming Yang Smart | China Life vs. 159681 | China Life vs. 159005 | China Life vs. Loctek Ergonomic Technology |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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