Correlation Between China Life and Jiajia Food
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By analyzing existing cross correlation between China Life Insurance and Jiajia Food Group, you can compare the effects of market volatilities on China Life and Jiajia Food 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 Jiajia Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Jiajia Food.
Diversification Opportunities for China Life and Jiajia Food
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Jiajia is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Jiajia Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiajia Food Group 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 Jiajia Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiajia Food Group has no effect on the direction of China Life i.e., China Life and Jiajia Food go up and down completely randomly.
Pair Corralation between China Life and Jiajia Food
Assuming the 90 days trading horizon China Life is expected to generate 1.95 times less return on investment than Jiajia Food. But when comparing it to its historical volatility, China Life Insurance is 1.44 times less risky than Jiajia Food. It trades about 0.02 of its potential returns per unit of risk. Jiajia Food Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 362.00 in Jiajia Food Group on August 31, 2024 and sell it today you would earn a total of 81.00 from holding Jiajia Food Group or generate 22.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.72% |
| Values | Daily Returns |
China Life Insurance vs. Jiajia Food Group
Performance |
| Timeline |
| China Life Insurance |
| Jiajia Food Group |
China Life and Jiajia Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Jiajia Food
The main advantage of trading using opposite China Life and Jiajia Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Jiajia Food 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 Jiajia Food will offset losses from the drop in Jiajia Food's long position.| China Life vs. XinJiang GuoTong Pipeline | China Life vs. Shandong Hongchuang Aluminum | China Life vs. Zhejiang Yongjin Metal | China Life vs. China National Software |
| Jiajia Food vs. Lutian Machinery Co | Jiajia Food vs. PetroChina Co Ltd | Jiajia Food vs. Bank of China | Jiajia Food vs. Gansu Jiu Steel |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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