Correlation Between China Life and Mingchen Health
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By analyzing existing cross correlation between China Life Insurance and Mingchen Health Co, you can compare the effects of market volatilities on China Life and Mingchen Health 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 Mingchen Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Mingchen Health.
Diversification Opportunities for China Life and Mingchen Health
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Mingchen is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Mingchen Health Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mingchen Health 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 Mingchen Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mingchen Health has no effect on the direction of China Life i.e., China Life and Mingchen Health go up and down completely randomly.
Pair Corralation between China Life and Mingchen Health
Assuming the 90 days trading horizon China Life is expected to generate 4.02 times less return on investment than Mingchen Health. In addition to that, China Life is 1.21 times more volatile than Mingchen Health Co. It trades about 0.0 of its total potential returns per unit of risk. Mingchen Health Co is currently generating about 0.02 per unit of volatility. If you would invest 1,538 in Mingchen Health Co on September 4, 2024 and sell it today you would earn a total of 7.00 from holding Mingchen Health Co or generate 0.46% 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. Mingchen Health Co
Performance |
| Timeline |
| China Life Insurance |
| Mingchen Health |
China Life and Mingchen Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Mingchen Health
The main advantage of trading using opposite China Life and Mingchen Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Mingchen Health 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 Mingchen Health will offset losses from the drop in Mingchen Health's long position.| China Life vs. Beijing Kaiwen Education | China Life vs. Shanghai Action Education | China Life vs. Chengtun Mining Group | China Life vs. Zhejiang Publishing Media |
| Mingchen Health vs. Kuangda Technology Group | Mingchen Health vs. Dhc Software Co | Mingchen Health vs. Sinofibers Technology Co | Mingchen Health vs. Eastern Communications 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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