Correlation Between China Life and Huafa Industrial
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By analyzing existing cross correlation between China Life Insurance and Huafa Industrial Co, you can compare the effects of market volatilities on China Life and Huafa Industrial 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 Huafa Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Huafa Industrial.
Diversification Opportunities for China Life and Huafa Industrial
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Huafa is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Huafa Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huafa Industrial 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 Huafa Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huafa Industrial has no effect on the direction of China Life i.e., China Life and Huafa Industrial go up and down completely randomly.
Pair Corralation between China Life and Huafa Industrial
Assuming the 90 days trading horizon China Life Insurance is expected to under-perform the Huafa Industrial. In addition to that, China Life is 1.37 times more volatile than Huafa Industrial Co. It trades about -0.1 of its total potential returns per unit of risk. Huafa Industrial Co is currently generating about -0.06 per unit of volatility. If you would invest 681.00 in Huafa Industrial Co on September 13, 2024 and sell it today you would lose (14.00) from holding Huafa Industrial Co or give up 2.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Life Insurance vs. Huafa Industrial Co
Performance |
| Timeline |
| China Life Insurance |
| Huafa Industrial |
China Life and Huafa Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Huafa Industrial
The main advantage of trading using opposite China Life and Huafa Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Huafa Industrial 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 Huafa Industrial will offset losses from the drop in Huafa Industrial's long position.| China Life vs. BYD Co Ltd | China Life vs. China Mobile Limited | China Life vs. Agricultural Bank of | China Life vs. Industrial and Commercial |
| Huafa Industrial vs. China Life Insurance | Huafa Industrial vs. Cinda Securities Co | Huafa Industrial vs. Piotech Inc A | Huafa Industrial vs. Dongxing Sec Co |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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