Correlation Between China Life and China Fund
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By analyzing existing cross correlation between China Life Insurance and China Fund Management, you can compare the effects of market volatilities on China Life and China Fund 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 China Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and China Fund.
Diversification Opportunities for China Life and China Fund
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and China is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and China Fund Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Fund Management 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 China Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Fund Management has no effect on the direction of China Life i.e., China Life and China Fund go up and down completely randomly.
Pair Corralation between China Life and China Fund
Assuming the 90 days trading horizon China Life Insurance is expected to generate 3.27 times more return on investment than China Fund. However, China Life is 3.27 times more volatile than China Fund Management. It trades about 0.02 of its potential returns per unit of risk. China Fund Management is currently generating about 0.06 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 Against |
| Strength | Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
China Life Insurance vs. China Fund Management
Performance |
| Timeline |
| China Life Insurance |
| China Fund Management |
China Life and China Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and China Fund
The main advantage of trading using opposite China Life and China Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, China Fund 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 China Fund will offset losses from the drop in China Fund'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 |
| China Fund vs. Der International Home | China Fund vs. China World Trade | China Fund vs. Guangzhou Restaurants Group | China Fund vs. Shandong Homey Aquatic |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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