Correlation Between China Life and Shanghai Pudong
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By analyzing existing cross correlation between China Life Insurance and Shanghai Pudong Development, you can compare the effects of market volatilities on China Life and Shanghai Pudong 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 Shanghai Pudong. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Shanghai Pudong.
Diversification Opportunities for China Life and Shanghai Pudong
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Shanghai is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Shanghai Pudong Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Pudong Deve 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 Shanghai Pudong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Pudong Deve has no effect on the direction of China Life i.e., China Life and Shanghai Pudong go up and down completely randomly.
Pair Corralation between China Life and Shanghai Pudong
Assuming the 90 days trading horizon China Life is expected to generate 1.38 times less return on investment than Shanghai Pudong. In addition to that, China Life is 1.83 times more volatile than Shanghai Pudong Development. It trades about 0.02 of its total potential returns per unit of risk. Shanghai Pudong Development is currently generating about 0.06 per unit of volatility. If you would invest 704.00 in Shanghai Pudong Development on August 26, 2024 and sell it today you would earn a total of 244.00 from holding Shanghai Pudong Development or generate 34.66% 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. Shanghai Pudong Development
Performance |
| Timeline |
| China Life Insurance |
| Shanghai Pudong Deve |
China Life and Shanghai Pudong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Shanghai Pudong
The main advantage of trading using opposite China Life and Shanghai Pudong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Shanghai Pudong 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 Shanghai Pudong will offset losses from the drop in Shanghai Pudong's long position.| China Life vs. Ming Yang Smart | China Life vs. 159681 | China Life vs. 159005 | China Life vs. Loctek Ergonomic Technology |
| Shanghai Pudong vs. Fujian Longzhou Transportation | Shanghai Pudong vs. Tianshui Huatian Technology | Shanghai Pudong vs. Western Superconducting Tech | Shanghai Pudong vs. Saurer Intelligent Technology |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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