Correlation Between China Life and Nsfocus Information
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By analyzing existing cross correlation between China Life Insurance and Nsfocus Information Technology, you can compare the effects of market volatilities on China Life and Nsfocus Information 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 Nsfocus Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Nsfocus Information.
Diversification Opportunities for China Life and Nsfocus Information
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Nsfocus is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Nsfocus Information Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nsfocus Information 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 Nsfocus Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nsfocus Information has no effect on the direction of China Life i.e., China Life and Nsfocus Information go up and down completely randomly.
Pair Corralation between China Life and Nsfocus Information
Assuming the 90 days trading horizon China Life Insurance is expected to generate 0.57 times more return on investment than Nsfocus Information. However, China Life Insurance is 1.75 times less risky than Nsfocus Information. It trades about 0.08 of its potential returns per unit of risk. Nsfocus Information Technology is currently generating about 0.03 per unit of risk. If you would invest 3,066 in China Life Insurance on October 27, 2024 and sell it today you would earn a total of 1,021 from holding China Life Insurance or generate 33.3% 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. Nsfocus Information Technology
Performance |
| Timeline |
| China Life Insurance |
| Nsfocus Information |
China Life and Nsfocus Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Nsfocus Information
The main advantage of trading using opposite China Life and Nsfocus Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Nsfocus Information 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 Nsfocus Information will offset losses from the drop in Nsfocus Information's long position.| China Life vs. Wuhan Yangtze Communication | China Life vs. Mingchen Health Co | China Life vs. Dezhan HealthCare Co | China Life vs. Tianjin Hi Tech Development |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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