Correlation Between China Life and Chongqing Sulian
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By analyzing existing cross correlation between China Life Insurance and Chongqing Sulian Plastic, you can compare the effects of market volatilities on China Life and Chongqing Sulian 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 Chongqing Sulian. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Chongqing Sulian.
Diversification Opportunities for China Life and Chongqing Sulian
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Chongqing is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Chongqing Sulian Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Sulian Plastic 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 Chongqing Sulian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Sulian Plastic has no effect on the direction of China Life i.e., China Life and Chongqing Sulian go up and down completely randomly.
Pair Corralation between China Life and Chongqing Sulian
Assuming the 90 days trading horizon China Life Insurance is expected to under-perform the Chongqing Sulian. But the stock apears to be less risky and, when comparing its historical volatility, China Life Insurance is 1.35 times less risky than Chongqing Sulian. The stock trades about -0.1 of its potential returns per unit of risk. The Chongqing Sulian Plastic is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 2,861 in Chongqing Sulian Plastic on September 3, 2024 and sell it today you would lose (113.00) from holding Chongqing Sulian Plastic or give up 3.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Life Insurance vs. Chongqing Sulian Plastic
Performance |
| Timeline |
| China Life Insurance |
| Chongqing Sulian Plastic |
China Life and Chongqing Sulian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Chongqing Sulian
The main advantage of trading using opposite China Life and Chongqing Sulian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Chongqing Sulian 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 Chongqing Sulian will offset losses from the drop in Chongqing Sulian'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 |
| Chongqing Sulian vs. PetroChina Co Ltd | Chongqing Sulian vs. China Mobile Limited | Chongqing Sulian vs. Industrial and Commercial | Chongqing Sulian vs. China Life Insurance |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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