Correlation Between China Life and Elite Color
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By analyzing existing cross correlation between China Life Insurance and Elite Color Environmental, you can compare the effects of market volatilities on China Life and Elite Color 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 Elite Color. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Elite Color.
Diversification Opportunities for China Life and Elite Color
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Elite is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Elite Color Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elite Color Environmental 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 Elite Color. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elite Color Environmental has no effect on the direction of China Life i.e., China Life and Elite Color go up and down completely randomly.
Pair Corralation between China Life and Elite Color
Assuming the 90 days trading horizon China Life Insurance is expected to under-perform the Elite Color. In addition to that, China Life is 1.41 times more volatile than Elite Color Environmental. It trades about -0.06 of its total potential returns per unit of risk. Elite Color Environmental is currently generating about 0.2 per unit of volatility. If you would invest 602.00 in Elite Color Environmental on August 26, 2024 and sell it today you would earn a total of 60.00 from holding Elite Color Environmental or generate 9.97% 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. Elite Color Environmental
Performance |
| Timeline |
| China Life Insurance |
| Elite Color Environmental |
China Life and Elite Color Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Elite Color
The main advantage of trading using opposite China Life and Elite Color positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Elite Color 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 Elite Color will offset losses from the drop in Elite Color's long position.| China Life vs. Ming Yang Smart | China Life vs. 159681 | China Life vs. 159005 | China Life vs. Loctek Ergonomic Technology |
| Elite Color vs. Zijin Mining Group | Elite Color vs. Baoshan Iron Steel | Elite Color vs. Shandong Gold Mining | Elite Color vs. Rongsheng Petrochemical 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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