Correlation Between China Life and Contemporary Amperex
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By analyzing existing cross correlation between China Life Insurance and Contemporary Amperex Technology, you can compare the effects of market volatilities on China Life and Contemporary Amperex 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 Contemporary Amperex. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Contemporary Amperex.
Diversification Opportunities for China Life and Contemporary Amperex
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Contemporary is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Contemporary Amperex Technolog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contemporary Amperex 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 Contemporary Amperex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contemporary Amperex has no effect on the direction of China Life i.e., China Life and Contemporary Amperex go up and down completely randomly.
Pair Corralation between China Life and Contemporary Amperex
Assuming the 90 days trading horizon China Life Insurance is expected to generate 0.99 times more return on investment than Contemporary Amperex. However, China Life Insurance is 1.01 times less risky than Contemporary Amperex. It trades about 0.01 of its potential returns per unit of risk. Contemporary Amperex Technology is currently generating about -0.02 per unit of risk. If you would invest 4,096 in China Life Insurance on October 26, 2024 and sell it today you would earn a total of 14.00 from holding China Life Insurance or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Life Insurance vs. Contemporary Amperex Technolog
Performance |
| Timeline |
| China Life Insurance |
| Contemporary Amperex |
China Life and Contemporary Amperex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Contemporary Amperex
The main advantage of trading using opposite China Life and Contemporary Amperex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Contemporary Amperex 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 Contemporary Amperex will offset losses from the drop in Contemporary Amperex's long position.| China Life vs. Industrial and Commercial | China Life vs. Agricultural Bank of | China Life vs. China Construction Bank | China Life vs. Bank of China |
| Contemporary Amperex vs. Agricultural Bank of | Contemporary Amperex vs. Industrial Bank Co | Contemporary Amperex vs. Ciwen Media Co | Contemporary Amperex vs. Shanghai Xinhua Media |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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