Correlation Between China Life and Anhui Huaren
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By analyzing existing cross correlation between China Life Insurance and Anhui Huaren Health, you can compare the effects of market volatilities on China Life and Anhui Huaren 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 Anhui Huaren. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Anhui Huaren.
Diversification Opportunities for China Life and Anhui Huaren
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Anhui is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Anhui Huaren Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Huaren Health 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 Anhui Huaren. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Huaren Health has no effect on the direction of China Life i.e., China Life and Anhui Huaren go up and down completely randomly.
Pair Corralation between China Life and Anhui Huaren
Assuming the 90 days trading horizon China Life Insurance is expected to generate 0.67 times more return on investment than Anhui Huaren. However, China Life Insurance is 1.49 times less risky than Anhui Huaren. It trades about 0.02 of its potential returns per unit of risk. Anhui Huaren Health is currently generating about -0.02 per unit of risk. If you would invest 3,771 in China Life Insurance on August 31, 2024 and sell it today you would earn a total of 439.00 from holding China Life Insurance or generate 11.64% 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. Anhui Huaren Health
Performance |
| Timeline |
| China Life Insurance |
| Anhui Huaren Health |
China Life and Anhui Huaren Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Anhui Huaren
The main advantage of trading using opposite China Life and Anhui Huaren positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Anhui Huaren 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 Anhui Huaren will offset losses from the drop in Anhui Huaren's long position.| China Life vs. XinJiang GuoTong Pipeline | China Life vs. Shandong Hongchuang Aluminum | China Life vs. Zhejiang Yongjin Metal | China Life vs. China National Software |
| Anhui Huaren vs. Lutian Machinery Co | Anhui Huaren vs. PetroChina Co Ltd | Anhui Huaren vs. Bank of China | Anhui Huaren vs. Gansu Jiu Steel |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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