Correlation Between China Life and Penghua Shenzhen
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By analyzing existing cross correlation between China Life Insurance and Penghua Shenzhen Energy, you can compare the effects of market volatilities on China Life and Penghua Shenzhen 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 Penghua Shenzhen. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Penghua Shenzhen.
Diversification Opportunities for China Life and Penghua Shenzhen
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and Penghua is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Penghua Shenzhen Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penghua Shenzhen Energy 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 Penghua Shenzhen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penghua Shenzhen Energy has no effect on the direction of China Life i.e., China Life and Penghua Shenzhen go up and down completely randomly.
Pair Corralation between China Life and Penghua Shenzhen
Assuming the 90 days trading horizon China Life Insurance is expected to generate 2.0 times more return on investment than Penghua Shenzhen. However, China Life is 2.0 times more volatile than Penghua Shenzhen Energy. It trades about 0.02 of its potential returns per unit of risk. Penghua Shenzhen Energy is currently generating about 0.0 per unit of risk. If you would invest 3,657 in China Life Insurance on August 25, 2024 and sell it today you would earn a total of 520.00 from holding China Life Insurance or generate 14.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Life Insurance vs. Penghua Shenzhen Energy
Performance |
| Timeline |
| China Life Insurance |
| Penghua Shenzhen Energy |
China Life and Penghua Shenzhen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Penghua Shenzhen
The main advantage of trading using opposite China Life and Penghua Shenzhen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Penghua Shenzhen 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 Penghua Shenzhen will offset losses from the drop in Penghua Shenzhen's long position.| China Life vs. Ming Yang Smart | China Life vs. 159681 | China Life vs. 159005 | China Life vs. Loctek Ergonomic Technology |
| Penghua Shenzhen vs. Industrial and Commercial | Penghua Shenzhen vs. Kweichow Moutai Co | Penghua Shenzhen vs. Agricultural Bank of | Penghua Shenzhen vs. China Mobile Limited |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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