Correlation Between China Life and Shenzhen Silver
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By analyzing existing cross correlation between China Life Insurance and Shenzhen Silver Basis, you can compare the effects of market volatilities on China Life and Shenzhen Silver 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 Shenzhen Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Shenzhen Silver.
Diversification Opportunities for China Life and Shenzhen Silver
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Shenzhen is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Shenzhen Silver Basis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Silver Basis 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 Shenzhen Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Silver Basis has no effect on the direction of China Life i.e., China Life and Shenzhen Silver go up and down completely randomly.
Pair Corralation between China Life and Shenzhen Silver
Assuming the 90 days trading horizon China Life is expected to generate 1.52 times less return on investment than Shenzhen Silver. But when comparing it to its historical volatility, China Life Insurance is 1.44 times less risky than Shenzhen Silver. It trades about 0.14 of its potential returns per unit of risk. Shenzhen Silver Basis is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 832.00 in Shenzhen Silver Basis on September 13, 2024 and sell it today you would earn a total of 344.00 from holding Shenzhen Silver Basis or generate 41.35% 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. Shenzhen Silver Basis
Performance |
| Timeline |
| China Life Insurance |
| Shenzhen Silver Basis |
China Life and Shenzhen Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Shenzhen Silver
The main advantage of trading using opposite China Life and Shenzhen Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Shenzhen Silver 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 Shenzhen Silver will offset losses from the drop in Shenzhen Silver's long position.| China Life vs. BYD Co Ltd | China Life vs. China Mobile Limited | China Life vs. Agricultural Bank of | China Life vs. Industrial and Commercial |
| Shenzhen Silver vs. Hunan Mendale Hometextile | Shenzhen Silver vs. Oppein Home Group | Shenzhen Silver vs. Chengdu Spaceon Electronics | Shenzhen Silver vs. Sanbo Hospital Management |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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