Correlation Between China Life and Hithink RoyalFlush
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By analyzing existing cross correlation between China Life Insurance and Hithink RoyalFlush Info, you can compare the effects of market volatilities on China Life and Hithink RoyalFlush 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 Hithink RoyalFlush. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Hithink RoyalFlush.
Diversification Opportunities for China Life and Hithink RoyalFlush
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Hithink is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Hithink RoyalFlush Info in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hithink RoyalFlush Info 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 Hithink RoyalFlush. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hithink RoyalFlush Info has no effect on the direction of China Life i.e., China Life and Hithink RoyalFlush go up and down completely randomly.
Pair Corralation between China Life and Hithink RoyalFlush
Assuming the 90 days trading horizon China Life is expected to generate 2.66 times less return on investment than Hithink RoyalFlush. But when comparing it to its historical volatility, China Life Insurance is 2.21 times less risky than Hithink RoyalFlush. It trades about 0.12 of its potential returns per unit of risk. Hithink RoyalFlush Info is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 12,660 in Hithink RoyalFlush Info on September 3, 2024 and sell it today you would earn a total of 20,907 from holding Hithink RoyalFlush Info or generate 165.14% 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. Hithink RoyalFlush Info
Performance |
| Timeline |
| China Life Insurance |
| Hithink RoyalFlush Info |
China Life and Hithink RoyalFlush Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Hithink RoyalFlush
The main advantage of trading using opposite China Life and Hithink RoyalFlush positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Hithink RoyalFlush 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 Hithink RoyalFlush will offset losses from the drop in Hithink RoyalFlush's long position.| China Life vs. Chongqing Road Bridge | China Life vs. Wuhan Xianglong Power | China Life vs. Empyrean Technology Co | China Life vs. Yuanjie Semiconductor Technology |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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