Correlation Between China Life and Sinomach Automobile
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By analyzing existing cross correlation between China Life Insurance and Sinomach Automobile Co, you can compare the effects of market volatilities on China Life and Sinomach Automobile 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 Sinomach Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Life and Sinomach Automobile.
Diversification Opportunities for China Life and Sinomach Automobile
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Sinomach is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding China Life Insurance and Sinomach Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinomach Automobile 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 Sinomach Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinomach Automobile has no effect on the direction of China Life i.e., China Life and Sinomach Automobile go up and down completely randomly.
Pair Corralation between China Life and Sinomach Automobile
Assuming the 90 days trading horizon China Life is expected to generate 23.36 times less return on investment than Sinomach Automobile. In addition to that, China Life is 1.67 times more volatile than Sinomach Automobile Co. It trades about 0.0 of its total potential returns per unit of risk. Sinomach Automobile Co is currently generating about 0.17 per unit of volatility. If you would invest 636.00 in Sinomach Automobile Co on September 4, 2024 and sell it today you would earn a total of 44.00 from holding Sinomach Automobile Co or generate 6.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Life Insurance vs. Sinomach Automobile Co
Performance |
| Timeline |
| China Life Insurance |
| Sinomach Automobile |
China Life and Sinomach Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Life and Sinomach Automobile
The main advantage of trading using opposite China Life and Sinomach Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Life position performs unexpectedly, Sinomach Automobile 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 Sinomach Automobile will offset losses from the drop in Sinomach Automobile's long position.| China Life vs. Beijing Kaiwen Education | China Life vs. Shanghai Action Education | China Life vs. Chengtun Mining Group | China Life vs. Zhejiang Publishing Media |
| Sinomach Automobile vs. Guangdong Jingyi Metal | Sinomach Automobile vs. Gem Year Industrial Co | Sinomach Automobile vs. Ye Chiu Metal | Sinomach Automobile vs. Shenyang Huitian Thermal |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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