Correlation Between China Life and Huizhou Desay
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By analyzing existing cross correlation between China Life Insurance and Huizhou Desay SV, you can compare the effects of market volatilities on China Life and Huizhou Desay 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 Huizhou Desay. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Huizhou Desay.
Diversification Opportunities for China Life and Huizhou Desay
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Huizhou is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Huizhou Desay SV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huizhou Desay SV 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 Huizhou Desay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huizhou Desay SV has no effect on the direction of China Life i.e., China Life and Huizhou Desay go up and down completely randomly.
Pair Corralation between China Life and Huizhou Desay
Assuming the 90 days trading horizon China Life Insurance is expected to generate 0.67 times more return on investment than Huizhou Desay. However, China Life Insurance is 1.49 times less risky than Huizhou Desay. It trades about 0.03 of its potential returns per unit of risk. Huizhou Desay SV is currently generating about 0.01 per unit of risk. If you would invest 3,293 in China Life Insurance on October 30, 2024 and sell it today you would earn a total of 767.00 from holding China Life Insurance or generate 23.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
China Life Insurance vs. Huizhou Desay SV
Performance |
| Timeline |
| China Life Insurance |
| Huizhou Desay SV |
China Life and Huizhou Desay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Huizhou Desay
The main advantage of trading using opposite China Life and Huizhou Desay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Huizhou Desay 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 Huizhou Desay will offset losses from the drop in Huizhou Desay's long position.| China Life vs. BizConf Telecom Co | China Life vs. Shenzhen Zhongzhuang Construction | China Life vs. Agricultural Bank of | China Life vs. Wintao Communications Co |
| Huizhou Desay vs. Peoples Insurance of | Huizhou Desay vs. Guangdong Jinma Entertainment | Huizhou Desay vs. Ping An Insurance | Huizhou Desay vs. Jiangxi Naipu Mining |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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