Correlation Between China Life and Digiwin Software
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By analyzing existing cross correlation between China Life Insurance and Digiwin Software Co, you can compare the effects of market volatilities on China Life and Digiwin Software 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 Digiwin Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Digiwin Software.
Diversification Opportunities for China Life and Digiwin Software
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between China and Digiwin is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Digiwin Software Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digiwin Software 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 Digiwin Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digiwin Software has no effect on the direction of China Life i.e., China Life and Digiwin Software go up and down completely randomly.
Pair Corralation between China Life and Digiwin Software
Assuming the 90 days trading horizon China Life Insurance is expected to generate 0.49 times more return on investment than Digiwin Software. However, China Life Insurance is 2.04 times less risky than Digiwin Software. It trades about -0.23 of its potential returns per unit of risk. Digiwin Software Co is currently generating about -0.12 per unit of risk. If you would invest 4,248 in China Life Insurance on October 25, 2024 and sell it today you would lose (333.00) from holding China Life Insurance or give up 7.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Life Insurance vs. Digiwin Software Co
Performance |
| Timeline |
| China Life Insurance |
| Digiwin Software |
China Life and Digiwin Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Digiwin Software
The main advantage of trading using opposite China Life and Digiwin Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Digiwin Software 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 Digiwin Software will offset losses from the drop in Digiwin Software'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 |
| Digiwin Software vs. Kweichow Moutai Co | Digiwin Software vs. NAURA Technology Group | Digiwin Software vs. APT Medical | Digiwin Software vs. BYD Co Ltd |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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