Correlation Between China Life and Guangzhou Ruoyuchen
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By analyzing existing cross correlation between China Life Insurance and Guangzhou Ruoyuchen Information, you can compare the effects of market volatilities on China Life and Guangzhou Ruoyuchen 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 Guangzhou Ruoyuchen. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Guangzhou Ruoyuchen.
Diversification Opportunities for China Life and Guangzhou Ruoyuchen
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and Guangzhou is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Guangzhou Ruoyuchen Informatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Ruoyuchen 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 Guangzhou Ruoyuchen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Ruoyuchen has no effect on the direction of China Life i.e., China Life and Guangzhou Ruoyuchen go up and down completely randomly.
Pair Corralation between China Life and Guangzhou Ruoyuchen
Assuming the 90 days trading horizon China Life Insurance is expected to under-perform the Guangzhou Ruoyuchen. But the stock apears to be less risky and, when comparing its historical volatility, China Life Insurance is 3.03 times less risky than Guangzhou Ruoyuchen. The stock trades about -0.23 of its potential returns per unit of risk. The Guangzhou Ruoyuchen Information is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 2,960 in Guangzhou Ruoyuchen Information on October 25, 2024 and sell it today you would lose (237.00) from holding Guangzhou Ruoyuchen Information or give up 8.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Life Insurance vs. Guangzhou Ruoyuchen Informatio
Performance |
| Timeline |
| China Life Insurance |
| Guangzhou Ruoyuchen |
China Life and Guangzhou Ruoyuchen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Guangzhou Ruoyuchen
The main advantage of trading using opposite China Life and Guangzhou Ruoyuchen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Guangzhou Ruoyuchen 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 Guangzhou Ruoyuchen will offset losses from the drop in Guangzhou Ruoyuchen's long position.| China Life vs. Bank of China | China Life vs. Kweichow Moutai Co | China Life vs. PetroChina Co Ltd | China Life vs. Bank of Communications |
| Guangzhou Ruoyuchen vs. Industrial and Commercial | Guangzhou Ruoyuchen vs. Agricultural Bank of | Guangzhou Ruoyuchen vs. China Construction Bank | Guangzhou Ruoyuchen vs. Bank of China |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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