Correlation Between China Life and Xinjiang Beixin
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By analyzing existing cross correlation between China Life Insurance and Xinjiang Beixin RoadBridge, you can compare the effects of market volatilities on China Life and Xinjiang Beixin 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 Xinjiang Beixin. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Xinjiang Beixin.
Diversification Opportunities for China Life and Xinjiang Beixin
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Xinjiang is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Xinjiang Beixin RoadBridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang Beixin Road 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 Xinjiang Beixin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Beixin Road has no effect on the direction of China Life i.e., China Life and Xinjiang Beixin go up and down completely randomly.
Pair Corralation between China Life and Xinjiang Beixin
Assuming the 90 days trading horizon China Life is expected to generate 8.33 times less return on investment than Xinjiang Beixin. But when comparing it to its historical volatility, China Life Insurance is 1.07 times less risky than Xinjiang Beixin. It trades about 0.02 of its potential returns per unit of risk. Xinjiang Beixin RoadBridge is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 365.00 in Xinjiang Beixin RoadBridge on September 5, 2024 and sell it today you would earn a total of 50.00 from holding Xinjiang Beixin RoadBridge or generate 13.7% 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. Xinjiang Beixin RoadBridge
Performance |
| Timeline |
| China Life Insurance |
| Xinjiang Beixin Road |
China Life and Xinjiang Beixin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Xinjiang Beixin
The main advantage of trading using opposite China Life and Xinjiang Beixin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Xinjiang Beixin 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 Xinjiang Beixin will offset losses from the drop in Xinjiang Beixin's long position.| China Life vs. Fujian Oriental Silver | China Life vs. Humanwell Healthcare Group | China Life vs. Chenzhou Jingui Silver | China Life vs. Jiangxi Naipu Mining |
| Xinjiang Beixin vs. China Life Insurance | Xinjiang Beixin vs. Cinda Securities Co | Xinjiang Beixin vs. Piotech Inc A | Xinjiang Beixin 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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