Correlation Between China Life and Shanghai Yaoji
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By analyzing existing cross correlation between China Life Insurance and Shanghai Yaoji Playing, you can compare the effects of market volatilities on China Life and Shanghai Yaoji 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 Shanghai Yaoji. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Shanghai Yaoji.
Diversification Opportunities for China Life and Shanghai Yaoji
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Shanghai is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Shanghai Yaoji Playing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Yaoji Playing 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 Shanghai Yaoji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Yaoji Playing has no effect on the direction of China Life i.e., China Life and Shanghai Yaoji go up and down completely randomly.
Pair Corralation between China Life and Shanghai Yaoji
Assuming the 90 days trading horizon China Life Insurance is expected to under-perform the Shanghai Yaoji. But the stock apears to be less risky and, when comparing its historical volatility, China Life Insurance is 1.37 times less risky than Shanghai Yaoji. The stock trades about -0.01 of its potential returns per unit of risk. The Shanghai Yaoji Playing is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 2,566 in Shanghai Yaoji Playing on September 3, 2024 and sell it today you would earn a total of 612.00 from holding Shanghai Yaoji Playing or generate 23.85% 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. Shanghai Yaoji Playing
Performance |
| Timeline |
| China Life Insurance |
| Shanghai Yaoji Playing |
China Life and Shanghai Yaoji Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Shanghai Yaoji
The main advantage of trading using opposite China Life and Shanghai Yaoji positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Shanghai Yaoji 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 Shanghai Yaoji will offset losses from the drop in Shanghai Yaoji'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 |
| Shanghai Yaoji vs. PetroChina Co Ltd | Shanghai Yaoji vs. China Mobile Limited | Shanghai Yaoji vs. Industrial and Commercial | Shanghai Yaoji 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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