Correlation Between China Life and Hubei Forbon
Specify exactly 2 symbols:
By analyzing existing cross correlation between China Life Insurance and Hubei Forbon Technology, you can compare the effects of market volatilities on China Life and Hubei Forbon 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 Hubei Forbon. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Hubei Forbon.
Diversification Opportunities for China Life and Hubei Forbon
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Hubei is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Hubei Forbon Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Forbon Technology 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 Hubei Forbon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Forbon Technology has no effect on the direction of China Life i.e., China Life and Hubei Forbon go up and down completely randomly.
Pair Corralation between China Life and Hubei Forbon
Assuming the 90 days trading horizon China Life is expected to generate 1.67 times less return on investment than Hubei Forbon. But when comparing it to its historical volatility, China Life Insurance is 1.33 times less risky than Hubei Forbon. It trades about 0.03 of its potential returns per unit of risk. Hubei Forbon Technology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 674.00 in Hubei Forbon Technology on September 4, 2024 and sell it today you would earn a total of 253.00 from holding Hubei Forbon Technology or generate 37.54% 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. Hubei Forbon Technology
Performance |
| Timeline |
| China Life Insurance |
| Hubei Forbon Technology |
China Life and Hubei Forbon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Hubei Forbon
The main advantage of trading using opposite China Life and Hubei Forbon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Hubei Forbon 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 Hubei Forbon will offset losses from the drop in Hubei Forbon's long position.| China Life vs. Beijing Kaiwen Education | China Life vs. Shanghai Action Education | China Life vs. Chengtun Mining Group | China Life vs. Zhejiang Publishing Media |
| Hubei Forbon vs. Zijin Mining Group | Hubei Forbon vs. Wanhua Chemical Group | Hubei Forbon vs. Baoshan Iron Steel | Hubei Forbon vs. Rongsheng Petrochemical Co |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |